What is Single Touch Payroll (STP)?

Phil Johnson

18 May 2017    |   

Single Touch Payroll is a Federal Government initiative aimed at streamlining business reporting obligations regarding certain taxes and wage information. Often referred to as Single Touch Payroll, or Single Touch Payroll Reporting (STPR), it was legislated on the September 16 2016, under the Budget Savings (Omnibus) Act 2016. Under the legislation, employers will be required to report ordinary time earnings, staff wages, Pay-As-You-Go (PAYG) withholding information, and superannuation contributions directly to the ATO, at each payroll cycle. Key dates for Single Touch Payroll Single Touch Payroll will become mandatory July 1 2018 for ‘substantial’ employers, those with 20 or more employees as of April 2018. However, it will be available to employers July 1 2017, for those who wish to begin reporting earlier. For employers with 19 employees or less, Single Touch Payroll will also be made available July 1 2017. There currently is no information regarding whether it will become mandatory for employers with 19 employees of less. Single Touch Payroll will provide employer payroll data in ‘real time’ to the ATO. This will allow them to monitor payroll compliance, and perform data-matching to determine if Superannuation Guarantee Charge as well as PAYG withholding obligations are met. For employers, Single Touch Payroll will seek reduce the administrative reporting burden by providing an automated reporting system throughout the entire financial year, that ensures transparency. Changes for Employers Ordinary Time Earnings, Salary or wages, and PAYG withholding information will reported in real time to the ATO, as payroll is processed periodically. Super contributions will be reported to the ATO as they are paid. Employers will need to update their payroll software to be STPR compliant, or implement STPR compliant payroll software, if they currently don’t have one. New employees will have the option to complete TFN and Super Choice forms online. STPR will become the approved form of reporting for PAYG withholding. Employers who use STPR to report their PAYG withholding obligations will have their PAYG withholding prefilled in their BAS by the ATO Employers will no longer be required to submit an annual PAYG report to the ATO. Employers may no longer need to supply payment summaries to employees. Changes for Employees View online year-to-date pay, the tax that has been withheld as well as your super entitlements throughout the year. Complete pre-filled TFN and Super Choice forms online when you start a new job. Access a range of tax and superannuation services, lodge tax returns and track your super online, using the myGov portal. Where to now? July 2018 is slowly creeping up, and it’s important that employers start thinking about Single Touch Payroll, and what it will mean for their business. Business that currently use payroll software, will need to upgrade their system to be STPR compliant. For businesses that are currently not using any payroll software, they will be required to implement STPR compliant software prior to July 1, 2018. In addition to this, all businesses should consider the robustness of their current payroll processes, including the accuracy and efficiency in how staff are paid. Integrating a compliant workforce management system with your payroll software is a simple and effective way to ensure that you remain compliant in all aspects of the payroll process. For more information about Single Touch Payroll, visit the ATO website.

Single Touch Payroll is a Federal Government initiative aimed at streamlining business reporting obligations regarding certain taxes and wage information.

Often referred to as Single Touch Payroll, or Single Touch Payroll Reporting (STPR), it was legislated on the September 16 2016, under the Budget Savings (Omnibus) Act 2016.

Under the legislation, employers will be required to report ordinary time earnings, staff wages, Pay-As-You-Go (PAYG) withholding information, and superannuation contributions directly to the ATO, at each payroll cycle.

Key dates for Single Touch Payroll

Single Touch Payroll will become mandatory July 1 2018 for ‘substantial’ employers, those with 20 or more employees as of April 2018. However, it will be available to employers July 1 2017, for those who wish to begin reporting earlier.

For employers with 19 employees or less, Single Touch Payroll will also be made available July 1 2017. There currently is no information regarding whether it will become mandatory for employers with 19 employees of less.

Single Touch Payroll will provide employer payroll data in ‘real time’ to the ATO. This will allow them to monitor payroll compliance, and perform data-matching to determine if Superannuation Guarantee Charge as well as PAYG withholding obligations are met.

For employers, Single Touch Payroll will seek reduce the administrative reporting burden by providing an automated reporting system throughout the entire financial year, that ensures transparency.

Changes for Employers

  1. Ordinary Time Earnings, Salary or wages, and PAYG withholding information will reported in real time to the ATO, as payroll is processed periodically.
  2. Super contributions will be reported to the ATO as they are paid.
  3. Employers will need to update their payroll software to be STPR compliant, or implement STPR compliant payroll software, if they currently don’t have one.
  4. New employees will have the option to complete TFN and Super Choice forms online.
  5. STPR will become the approved form of reporting for PAYG withholding.
  6. Employers who use STPR to report their PAYG withholding obligations will have their PAYG withholding prefilled in their BAS by the ATO
  7. Employers will no longer be required to submit an annual PAYG report to the ATO.
  8. Employers may no longer need to supply payment summaries to employees.

Changes for Employees

  1. View online year-to-date pay, the tax that has been withheld as well as your super entitlements throughout the year.
  2. Complete pre-filled TFN and Super Choice forms online when you start a new job.
  3. Access a range of tax and superannuation services, lodge tax returns and track your super online, using the myGov portal.

Where to now?

July 2018 is slowly creeping up, and it’s important that employers start thinking about Single Touch Payroll, and what it will mean for their business.

Business that currently use payroll software, will need to upgrade their system to be STPR compliant. For businesses that are currently not using any payroll software, they will be required to implement STPR compliant software prior to July 1, 2018.

In addition to this, all businesses should consider the robustness of their current payroll processes, including the accuracy and efficiency in how staff are paid. Integrating a compliant workforce management system with your payroll software is a simple and effective way to ensure that you remain compliant in all aspects of the payroll process.

For more information about Single Touch Payroll, visit the ATO website.

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How to be compliant for Single Touch Payroll

The new Federal Government initiative of Single Touch Payroll will aim to streamline business reporting obligations regarding certain taxes and wage information. Legislated on the 16 September 2016 under the Budget Savings (Omnibus) Act 2016, Single Touch Payroll (STP) will become mandatory July 1 2018, for employers with 20 or more employees. Single Touch Payroll will be available to employers July 1 2017, for those who wish to begin voluntary reporting earlier. Under the legislation, employers will be required to report ordinary time earnings, staff wages, Pay-As-You-Go (PAYG) withholding information, and superannuation contributions directly to the ATO, at each payroll cycle.  What do you need to do? In order to report the necessary information to the ATO businesses with 20 or more staff (as of April 1 2018) will be required to implement Single Touch Payroll compliant payroll solutions in their business, prior to July 1 2018. Payroll solutions refers to the accounting software, business management solutions or payroll software that you use to process payroll. Already have a payroll solution? Business with 20 or more employees (as of April 1 2018), that are already using a payroll solution will be required to update their software to be Single Touch Payroll compliant before July 1 2018. The ATO has advised that they are working closely with payroll providers to ensure that their products are ready for Single Touch Payroll in 2018. Don’t have a payroll solution? Businesses with 20 or more employees (as of April 1 2018), who don’t have a payroll solution in place, will need to implement one ahead of July 1, that is compliant with Single Touch Payroll. There is currently no requirement for employers with 19 or less employees (as of April 1 2018) to begin reporting through Single Touch Payroll. However, businesses can choose to implement a compliant Single Touch Payroll system if they wish to utilise Single Touch Payroll reporting. Someone else does your payroll? If you have a Tax or BAS agent or third party, who lodges your relevant paperwork your behalf, they will be required to report through Single Touch Payroll from July 1 2018. The ATO is working closely with Tax and BAS agents to ensure they are ready for Single Touch Payroll. Individuals should however check with their agent before July 1 2018, to confirm that they are compliant and ready for Single Touch Payroll. Benefits of updating your Payroll solution Upgrading or implementing a STP compliant system is a great excuse to evaluate the other business systems you have in place, and upgrade them where necessary. Integrating core business systems such as payroll, workforce management, POS, inventory, record keeping and reporting, can be hugely beneficial in streamlining business efficiencies. Not only does its result is greater oversight and compliance, but it also provides a more wholesome and in-depth overview of the entire business, which can help you to make smarter more informed decisions for the whole business. For more information about how to be compliant with Single Touch Payroll, chat to your accountant or visit the ATO website.  

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About the author

Phil Johnson

Partner Manager: Having used Tanda in a management capacity prior to working at Tanda, Phil understands first hand the value that Tanda can bring to a business. Phil now manages Tanda's Partner Program, to assist businesses to implement innovative solutions and processes in their business.

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