Single Touch Payroll
STP is a new concept being introduced to have business pay their staff obligations at the point of incurring the liability. If staff are paid weekly then the PAYG Withholding along with any Superannuation would be transmitted to the ATO at the time the payroll is processed. This applies to all staff paid weekly, fortnightly or monthly.
Reporting under this new system removes the requirement for employers to issue payment summaries, provide annual payroll reports and tax file number declarations to the ATO.
As this will be a big change for business and take some time to iron out any issues the ATO has said employers will not be liable for a penalty for a late STP report.
Some important points to keep in mind for the transition to Single Touch Payroll (STP) include:
- Employers with 20 or more employees will need to start reporting through Single Touch Payroll from 1 July 2018.
- Employers will report salary or wages, pay as you go (PAYG) withholding and super guarantee information to the ATO when they pay their employees.
- To determine if they are required to report through Single Touch Payroll, employers will need to do a headcount of their employees on 1 April 2018.
- An employer may have the option to invite their employees to complete tax file number (TFN) declaration and super standard choice forms online.
- Payroll software will need to be updated to a version that supports Single Touch Payroll.
- Employers can begin to report through Single Touch Payroll from 1 July 2017 if their software is Single Touch Payroll enabled.
- If you report payroll and super information to the ATO on behalf of clients with 20 or more employees, you should be thinking of ways you can support those clients to report through Single Touch Payroll.
Employee end-of-year pay information
Employers who report an employee’s details through Single Touch Payroll will not have to provide that employee with a payment summary at the end of financial year. They won’t be required to provide the ATO with a payment summary annual report for those employee’s details also.
Employers will need to notify the ATO when the payment summary data is considered final.
Cash flow will be an issue for some under this new plan but as it will be for all business by 2019 we need to understand the steps needed to meet the legal requirements.
Our roll in this will be to learn how this will impact your business and advice, where possible, on implementation to your daily routine.
If you require more information you can search ‘Single Touch Payroll’ or call the office and we can arrange a meeting to help you understand how it will work for you.
For further information