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Single Touch Payroll (“STP”) is a new initiative of the ATO that aims to streamline business reporting. When paying your employees through an STP-enabled payroll software the ATO will automatically receive your employee’s payment amount, PAYG withholding and superannuation information.

What Do I Need to Do?

On 1 April 2018 you must perform a headcount of your employees. Included in your count are:

  • Full time employees;
  • Part time employees;
  • Casual employees who are on your payroll and worked any time during March;
  • Employees based overseas;
  • Any absent employee or on leave (paid or unpaid);
  • Seasonal employees (staff who are engaged short term to meet a regular peak workload, e.g. harvest workers).

Do Not Include:

  • Any employee who ceased work prior to 1 April;
  • Casual employees who did not work in March;
  • Independent contractors;
  • Staff provided by a third-party labour hire organisation;
  • Company directors;
  • Office holders;
  • Religious practitioners.

If you have 20 or more employees on this date, STP is mandatory 1 July 2018. If you have 19 or less on this date, STP is mandatory 1 July 2019.

I Have 20 or More Employees – What Do I Need to Do?

You will need an STP-compliant payroll software solution. At time of writing, Australian software vendors MYOB, Xero, Reckon and Intuit will be compliant for 1 July.

If using their cloud software, it will be an automatic upgrade. If you access their payroll through a program installed on your computer, you may need to perform a software upgrade manually.
For further information on your specific software and upgrade requirements, please contact your accountant at WMS.

I Have 19 or Fewer Employees – What Do I Need to Do?

For now, nothing until 1 July 2019. STP will be optional for you this year, you may wait until 1 July 2019 before using this system.

At some point between now and 1 July 2019, you should contact your software provider to ensure your system is compliance.

Other Considerations

1. The ATO have stated that employers who are STP compliant throughout the full 2019 financial year, will technically not be required to provide employees with an annual PAYG payment summary;

2. These new measures give the ATO more data than ever, so it is important that those managing payroll have strong systems and procedures to ensure:

a. Correct disclosures are made in each pay run;
b. Correct super calculations are made; and
c. Payroll must be processed in-line with payment of employees.

More information can be sourced from the ATO website, and as always with any queries please contact your accountant at WMS.

DISCLAIMER: This article is intended to provide a general summary only and should not be relied on as a substitute for professional advice.

© 2018 WMS Solutions Pty Ltd