Single touch payroll …. Are you ready?

The ATO is changing the way employers have to report wages, pay as you go (PAYG) withholding and superannuation.

The initiative is called Single Touch Payroll (STP), and it will mean that an employer will need to report payroll details to the ATO each time a pay run is finalised. This should not change the way you process your pay. Your payroll software should do the necessary reporting for you automatically once your pay run is finalised.

STP is being rolled out progressively. From 1st July 2018, employers with 20 employees or more must start utilising STP to report to the ATO. Employers with under 20 employees are to start reporting from 1st July 2019 (this start date is still to be passed in legislation.)

The ATO is contacting over 150,000 businesses during March to inform them about STP and what they need to do to comply. 

To find out if you need to comply with STP as at 1st July, you need to do a head count of your employees on 1st April, 2018. 

You head count needs to include:

  • full-time employees
  • part-time employees
  • casual employees 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 (staff who are engaged short term to meet a regular peak workload, for example, harvest workers).

Once you meet the threshold to begin reporting under STP, you need to keep reporting even if your head count falls under 20 employees, unless you obtain exemption from the ATO.

The next step would be to contact your payroll software provider to ensure they are going to be STP compliant by 1st July. They can advise you what extra steps you might need to take to prepare your payroll data in readiness for their STP update. 

Also, be sure and check the ATO via their website or social media channels to ensure you stay up to date with the latest STP news. 

If you have any questions about STP, feel free to contact Wayne in our office, or visit the following links for more information.

ATO – Single Touch Payroll