Single Touch Payroll

What is Single Touch Payroll?

Single Touch Payroll (STP) is an Australian government initiative designed to streamline the way businesses report payroll payments to the Australian Taxation Office (ATO).

When Single Touch Payroll is introduced, employers will report on salary or wages, pay as you go (PAYG) withholding information and superannuation guarantee amounts electronically from their payroll software directly to the ATO.

This means employers will be able to meet their ATO reporting obligations at the same time they pay their employees, instead of running separate processes. It will also make the end of the financial year much simpler as employers will have already reported their payroll activity throughout the year.

Who is impacted & when?

If you are an employer with 20 or more employees on 1 April 2018 you will be required to conform to these new regulations from or before 1 July 2018.

On 1 April 2018 you will need to perform a headcount to determine if you have 20 or more employees. This is based on a headcount – not the full time equivalent (FTE).

The Australian Government has announced it will expand Single Touch Payroll to include employers with 19 or less employees from 1 July 2019. If you have 19 or fewer employees, you can choose to report through Single Touch Payroll once it is available.

When & what will I need to report?

Employers need to report an employee’s salary or wage, PAYG withholding and superannuation guarantee liability amounts to the ATO at the same time they pay their employees. Essentially, this means you will have to report to the ATO on or before every payday.

You can continue to use your existing payroll cycles. When a pay run is completed, the earnings, tax and super information for each employee will be sent to the ATO via your payroll software.

Will software providers upgrade their packages to provide STP reporting?

Those employers impacted by STP will need to either upgrade or replace their payroll system this financial year in order to meet their payroll reporting obligations.

Most payroll vendors are working closely with the ATO to ensure their payroll software products have Single Touch Payroll functionality in advance of the 1 July 2018 deadline. They will start releasing Single Touch Payroll products over time, letting their partners and clients know as solutions become available.

What should I do now?

Employers can prepare for an upgrade of their existing software solution and be ready for the April 1 employee headcount by ensuring all their employee details are correct and up-to-date.

Employers should also ensure that all appropriate staff are aware of the requirements of STP. This will not only help with compliance and training once STP is implemented but also help identify any issues that need to be resolved prior to implementation.

Check with your software partner to see when your STP ready software will be available. They can also provide information on your current software versions, functionality and where you are in the release cycle.

It may also be a time to review your payroll systems. Over time many businesses outgrow their entry-level payroll and accounting systems and it could be a good time to move to a more comprehensive system.

How can Acacia help?

Acacia’s consultants are available to answer your questions. We are keeping up-to-date with ATO announcements and liaising with Vendors to ensure the introduction of STP into your business will be as seamless as possible.