Important changes to Payroll...
Single Touch Payroll (STP) is a new reporting requirement currently being implemented by the Australian Taxation Office (ATO), and will become compulsory for employers with 20 or more employees on 1 July 2018, and it is planned by the ATO to be compulsory for all employers by 1 July 2019.
What is Single Touch Payroll?
STP is a requirement for your wages and payroll information to be sent to the ATO each time you process a pay run. Information supplied to the ATO will need to include:
- Each employee's name and tax file number (TFN)
- Gross amount paid
- Tax withheld
- Ordinary time earnings for the period, and
- Superannuation guarantee obligations
Note: The system will be designed so that the employee's tax file number will be hidden from your payroll department staff for security purposes.
How do I implement Single Touch Payroll?
Single Touch Payroll will soon be integrated within your accounting software. If your system is already automated with reports that can provide the information listed above for every pay cycle, the system may just need an update to become SBR-enabled.
However, if your system is still manual it is now time to discuss and review your internal processes as you will more than likely need to upgrade your software to be STP compatible.
Each software will have different ways in which the STP information will be passed to the ATO, so please keep an eye out on any bulletins or newsletters from your software provider in the near future. Aspen will also be watching out for these and will forward any relevant information on to you over the coming 6 months.
What does implementing STP mean for me?
Once you are part of the new regime, the reports and liabilities owing will be available in real time, meaning you can keep on top of your PAYGW and Superannuation obligations on a more regular basis. Your monthly or quarterly reporting to the ATO will also be simplified as the ATO will report to you each month or quarter the correct amount of PAYG tax withheld to pay in your activity statement. Each quarter there will also be information available regarding your superannuation obligations to either pay the ATO clearing house or your independent provider.
Our advice is to implement STP as soon as your software provider enables it. This will ensure you avoid any fines or penalties in the future from the ATO, as well as gives you a head-start and practice to ensure that your internal business processes are working correctly before the official start date of the regime.
Aspen Corporate are ready to answer any questions that you may have regarding the Single Touch Payroll system, and are able to assist with the implementation and/or assist in ensuring your software is STP compatible prior to 1 July 2018. Please call the partner in charge of your work with any queries prior to 31 March 2018 so that we have sufficient time to implement any necessary changes.