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Getting ready for Single Touch Payroll

Article By | | Accounting & Tax

Single Touch Payroll (STP) is an initiative by the Australian Taxation Office (ATO) which will significantly change payroll processes for employers.

What does it involve?

Employers will be required to report payments made to employees such as wages, pay as you go (PAYG) withholding and superannuation information to the ATO, directly from your payroll software at the same time you pay your employees.

When does STP start?

  • For employers with 20 or more employees, STP reporting starts from 1 July 2018.
  • For employers with 19 or less employees, STP reporting starts from 1 July 2019.

Employer checklist – how do you get ready for STP?

  • Step 1: Do a headcount of the employees you have on 1 April 2018

If you have 20 or more employees on 1 April 2018, you are considered a “substantial employer” and will need to report through STP, even if your employee numbers drop below 20 after this date.

  • Step 2: Update your payroll solution and start reporting through STP when ready

Payroll software providers are currently updating their products. A software product catalogue is available on the Australian Business Software Industry Association website, which will be updated with STP compliant solutions. You have the option to start STP reporting earlier if your payroll solution is ready.

What does STP mean for employees?

Employees will need a myGov account that is linked to ATO online services. Once this has been done, you will be able to see up-to-date payroll information after 1 July 2018.

Timeline

The following timeline provides a summary of what’s to come:

  • September 2017: The ATO will write to employers with 20 or more employees advising them of their STP reporting obligations.
  • October 2017: There will be an increase in the release of STP compliant solutions.
  • 1 April 2018: Employers will need to do a headcount of their employees to determine if they will need to report through STP from 1 July 2018.
  • From 1 July 2018: STP reporting is compulsory for substantial employers.

For further information about STP reporting and how it applies to you, please contact your Altitude Adviser.