Getting ready for Single Touch Payroll
Still getting used to writing or typing 2018? Surprised that we are already in February? The year can quickly get away from you and there are always so many things to do.
One of these things is Payroll. Staff must be paid on time, have the right amount of tax calculated and receive the benefits they are entitled too. This information must then be delivered promptly to the Tax Office. It is a key process within the business and must be on time and accurate every time.
In July 2018, the biggest Payroll reporting change in Australia’s history is happening. And you should start getting ready now.
Single Touch Payroll
Single Touch Payroll is an Australian government initiative to streamline business reporting. Employers will need to report employee payments electronically to the ATO with every pay cycle, including their salaries and wages, allowances, deductions and other payments, pay as you go (PAYG) withholding and super information.
Employers with 20 or more employees on 1 April 2018 will be required to conform to these new regulations by 1 July 2018.
This digital connection to the ATO will likely require your payroll systems to be modified. Software vendors are currently finalising upgrades to their payroll products to meet these new specifications.
There are things that you can start doing now to get ready for the new regime.
Make sure everyone in your business knows what’s happening.
The simplest thing that you can do now is to make sure everyone in the business is aware of the upcoming change and how it will impact them.
- Keep in touch with developments at the ATO and your software vendor. The ATO is providing regular updates about the operation of the new regime and feeding new technical specifications to the software vendors. Many software providers are also actively communicating about what they are doing to meet the STP requirements. Your software consultant, who supports your current payroll system, will be able to update you on new developments, provide information on your current set-up and help determine the best way to become STP-ready.
- Raise awareness within your business. Make STP a “project” within the business and ensure that senior management is aware of the timelines and are updated regularly on developments and progress towards implementation.
- Designate an owner of the STP Project. It is worthwhile allocating ownership of the project to an individual within the business. They can monitor developments, update the project calendar, field questions and feed new information back into the business.
Ensure your payroll software, and associated accounting, ERP, and operating systems can operate under the new regime
- Understand how your payroll system vendor is meeting STP requirements and what you will need to do. Payroll system upgrades and releases will roll out in the next few months. The software vendor and your consultant will update you on what will be required. In most cases, this will require an upgrade, which will need to be scheduled and implemented. Keep in mind that the End of Financial Year will be approaching at the same time!
- Check your operating system is up to scratch. Your consultant should be able to assess whether your operating and accounting systems are compatible with any payroll system upgrades. Could it be an opportunity to update to a more comprehensive system?
Encourage employees to create a myGov account linked to ATO Online
- Employees can also access benefits from the introduction of STP. They will be able to see their year-to-date pay, the tax that has been withheld, as well as their employer superannuation contributions. To access these benefits, employees will need a myGov account linked to the ATO’s online services. Getting your employees set up could potentially take some time. So it may be wise to encourage them to start now – even before your software is upgraded.
Understand which processes are impacted and need to be revised
- Ensure employee data is up to date and correct. Confirm you are correctly calculating PAYG withholding and employees’ super, and you have a compliant SuperStream solution.
- Understand what revised processes are required to transition to STP. New processes will be needed for submitting information to the ATO including the “payroll event” on or before payday; the reporting of commencement and cessation of employment, and for correcting any errors in data sent. Your processes around Year-End and Quarterly Business Activity Statements may also require revision.
Get ready now!
The July 2018 deadline for the introduction of the Single Touch Payroll processing is approaching fast. Employers with 20 or more employees on 1 April 2018 will be required to conform to these new regulations by 1 July 2018. The time to get started is now.
If you have any questions about STP please contact Acacia Consulting Services, we can assess your existing systems, determine what upgrades are required and implement and support the new software going forward.