The Single Touch Payroll (STP) is law and applies to all employers.
1. All “substantial” employers, (20 or more employees by headcount), must participate.
The count happens as of 1 April each year, commencing 2018.
You must then enter STP as of 1 July 2018.
This is law that has been passed by parliament.
2. All other employers.
You must then enter STP as of 1 July 2019.
We expect there will be a year of no penalties
This has been announced by the Minister and is not yet law. We expect it will be.
3. Anyone can elect to enter STP earlier than required
It is about reporting your Payroll, it is not about paying earlier.
You submit payroll and superannuation data to the ATO each “PayEvent”.
A PayEvent is each time you pay someone and you should be generating a pay slip. Some of the data on the pay slip is now sent to the ATO:
The year-to-date totals of gross wages, allowances, deductions and gross tax for each employee being paid.
The year to date amount of Superannuation Guarantee that has been accrued.
You will also report the W1 Gross Wages & W2 Gross Tax for the payrun (so that the ATO will prefill these totals for the BAS period onto the BAS).
Superannuation payment information is going to be sent to the ATO by the SuperFunds. This information will be used by the ATO to check you are paying.
Your payroll software should do it all for you.
It is a substantial change such that your software will need to control what is reported when and in what form. We recommend that you await the information from your payroll software provider and then bring your systems up to date.
If you do not have accounting software or internet, the ATO are considering other reporting mechanisms.
The ATO was required to be ready to receive STP information as of 1 July 2017. A limited release test of the system is in place. Further ATO capacity and software company testing will occur from now until 1 July 2018 and beyond.
Substantial employers must provide STP information from 1 July 2018. Other employers from 1 July 2019.
Any employer can enter STP as soon as they are able.
The ATO will gain greater visibility of all employers, enabling earlier activity to ensure the employer is paying their PAYGW and their SGC.
The employer will no longer be required to provide payment summaries to their employees. The ATO will provide them.
The ATO will prefill tax returns with the payroll information.
The ATO will make the payroll information available to employees all year through myGov.
What is the Impact?
STP means that your payroll system employee information (names, addresses, date of birth, TFN) needs to be accurate and complete all year.
Each payrun triggers the requirement to report to the ATO which enhances the requirement for someone to correctly authorise that the pay information is true and correct and able to be lodged. (Wait for the detail).
Hopefully your software will be able to provide a streamlined payroll process that includes the authorisation and also the submission of the reports to the ATO.
Future of STP
The ATO will streamline the process for a new employee by automating the Tax File Number Declaration and SuperChoice form into payroll software and myGov.
Note: The employer’s payroll records are always the “source of truth”. Therefore, any amendments to past pays, or any fixes required are updated in the employer’s systems and records. At the next PayEvent the ATO will receive the updated YTD information. There is no need to go back and amend past PayEvents.
The employer will still have to “finalise” a payroll year by indicating to the ATO that the information they are now being sent is the final version and can be used for tax returns.