From July 1st, 2018 employers with 20 or more staff will have to report to the ATO through Single Touch Payroll (STP). STP merges your reporting requirements to the ATO with your payroll processes through your existing payroll software.
This article is for informational purposes only and does not contain or constitute payroll or legal advice. You should not act on this information without seeking professional counsel.
The new law. The new law states that payment information (including salary or wages, allowances, and deductions), withholding amounts, and superannuation liability information or ordinary times earnings (OTE), must be reported on or before ‘pay day’. As a result of STP, employers who fully report all the information required will not have to comply with a number of other reporting obligations under the existing laws; though employers will need to provide a finalisation declaration to the ATO.
Who should have already started using Single Touch Payroll? Employers with 20 or more employees should have started this process on July 1st, 2018. Those with 19 or less employees are not required to begin using single touch payroll until July 1st, 2019, although they are welcome to begin using it before this time. The 20 or more headcount requirement includes full and part-time employees, employees based overseas, those who were absent on leave (paid or unpaid), and casuals who were on your payroll on April 1st and worked any time in March.
Employers with seasonal workers may find that their employee numbers on their payroll fluctuate above and below the required 20 employee cutoff which can make it difficult to know whether you need to be using STP. Find out if exemptions apply to you.
How to report. There are three ways to report through STP and which one you use is dependant on your current situation. You can report from your current payroll software once it is STP ready; some payroll software providers have applied for an extension to the July 1st deadline because they may not yet be ready so it is best to contact them to find out.
You may need to find a new payroll solution if you currently report to the ATO on paper or if your existing solution does not offer STP reporting. Adi Insights is a NetSuite Suite.app, the NetSuite payroll solution for Australian businesses is Infinet Cloud, they are STP ready.
You can also ask a third party, such as a registered agent or payroll service provider, to report on your behalf. It is your obligation as an employer to make sure they will be reporting through STP.
Changes for employees. The largest change for employees is that they will be able to see their year-to-date tax and super information in myGov. This information will be updated every time they are paid by their employer. The payment summary information will be called an ‘income statement’ in myGov.
STP has been introduced to streamline your payroll reporting to the ATO. If you have 20 or more employees you should already be doing it and if you have less than 20 employees you have until July 1st 2019 to get ready, but remember that it is your responsibility as an employer to make sure that the payroll software you’re using or that those reporting on your behalf are using STP.