Single Touch Payroll (STP) is a recent government initiative that has been introduced in order to streamline business reporting obligations. Through this system employers will be required to report payments such as salaries and wages, PAYG Withholding and Superannuation information directly to the Australian Taxation Office (ATO), at the same time that they pay their employees (ie. weekly, fortnightly or monthly).
It is important to note that the number of employees you pay will determine the start date that you will be required to start providing this information.
- For employers with 20 or more employees, your effective start date is 1 July 2018.
- For employers with 19 or less employees, your effective start date is 1 July 2019 (subject to legislation being passed).
How to count the number of employees
To determine the number of employees you have, all employers will need to do a headcount on the 1st April 2018. In the headcount, you need to count all employees as follows:
- Full-time employees
- Part-time employees
- Casual employee who are on your payroll on 1 April and worked any time during March
- Employees based overseas
- Any employee absent or on leave (paid or unpaid)
- Seasonal employees
You don’t include in the headcount, the following employees:
- Any employees who ceased employment before 1 April
- Casual employees who did not work in March
- Independent contractors
- Staff provided by a third-party labour hire organization
- Company directors
- Office holders
- Religious practitioners.
If you had 20 or more employees as at 1 April 2018, then you will need to start reporting through single touch payroll from 1 July 2018 even if your employees drop to 19 or less (unless you apply for and are granted an exemption).
How to report
There are a few ways that you can report this information through to the ATO:
- From your current payroll program when it is STP ready
- From a new payroll program which is STP ready
- Through a third party, such as a registered agent, for those who don’t have a payroll program.
Mainstream payroll software providers are currently updating their software to incorporate a solution for Single Touch Payroll. The ATO are working with digital service providers to determine if deferrals are required.
Single Touch Payroll for employees
Employees will continue to be paid in the same way as prior to STP. You will be able to see the information that your employer has provided to the ATO by logging into your myGov account and accessing the ATO online services.
You will also be able to check if your super has been paid, as there has been an increase in reporting requirements on Super Funds. This information will enable the ATO to check that your employer is paying your super entitlements.
Find out more about Single Touch Payroll, and eliminate the work involved, by speaking to one of our experienced team of business advisers today. Get in touch with BLG online or by calling (02) 4229 2211.