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The Single Touch Payroll and what it means for employers
Firms with 20 or more employees will be required to implement the Single Touch Payroll or STP from 1 July 2018.
STP is an Australian Taxation Office (ATO) initiative aimed at streamlining the way employers report their tax and superannuation information to the ATO.
Employers will be required to report salaries, wages, PAYG, and superannuation information to the ATO each pay period. With STP, end of financial year reconciliations should be much simpler for employers as payroll activity is reported to the ATO in real-time throughout the year.
Your employees will be able to access the details via their MyGov accounts.
Real-time reporting to the ATO will also help identify if an employer is falling short on making Super Guarantee payments.
What should employers do?
To identify whether reporting through STP is required, employers will need to do a head count of the number of employees within the firm on 1 April 2018. Those with 19 or less employees will have the option to report through STP.
Employers should ensure they have an updated payroll process to easily track payments and seamlessly move to STP. Those who are still making use of spreadsheets, like Excel, or manual payroll processes are encouraged to upgrade to an automatic payroll processing system to facilitate the use of STP reporting.
Note that the payroll cycle does not need to change and employers can continue to pay employees on their current pay schedule.
We will keep you updated on new information as it is released by the ATO over the coming months. In the meantime, if you require any accounting and taxation solutions, please contact McKinley Plowman on (08) 9301 2200 or click here to send an enquiry.
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