Single Touch Payroll (STP)

From 1 July 2018, changes to the way businesses report information to the ATO will come into effect. Specifically, businesses with more than 20 employees will be expected to report the tax and super information to the ATO each time they pay their employees. Businesses with less than 20 employees are expected to comply from 1 July 2019. 
 
To determine whether you will need to be compliant from 1 July, count the number of employees on your payroll from 1 April 2018. This includes permanent employees, casual employees and employees who are absent on leave. Do not count employees who ceased work before April 1, independent contractors, staff provided by a third party labour hire organisation or company directors. This headcount is a self-assessment and does not need to be reported to the ATO. 
 
About Single Touch Payroll (STP) 
 
Single Touch Payroll has been designed to streamline the reporting process. You can continue to use your current pay-roll software, however you will need to ensure it is updated to offer STP reporting. Contact your provider now to ensure this is the case. 
Using STP, the following information must be reported to the ATO on or before the day you withhold from a payment: 
 
  • Payment information, including salary or wages, allowances, deductions etc. 
     
  • Withholding amounts 
     
  • Superannuation liability information or ordinary time earnings (OTE) 
Your payroll cycle will not change. As part of STP, you may not need to provide employees with a payment summary at the end of each financial year for certain payments you report. This will be made available to employees through myGov. 
 
The first 12 months of STP will be treated as a transitional period by the Tax Office. During this period, employers will be exempt from administrative penalties for failing to report on time. Penalties can however be administered in the first 12 months if the Tax Office has given an employer a written notice advising that a failure to report on time in future may attract penalties. 
 
 
For more information, contact the AVA HR Advisory Service on 1300 788 977. 

 

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