Single Touch Payroll

Single Touch Payroll

Single Touch Payroll

It’s timely to look at Single Touch Payroll (STP), as it is being implemented for businesses with 20+ employees for the financial year beginning 1 July 2018.  This number is based on headcount as at 1 April 2018, not full time equivalents.

To understand the rules around counting your employees, the ATO has provided this guidance.

For businesses with 19, or less, employees, there is proposed legislation that would require them to move to single touch payroll by the following financial year – beginning 1 July 2019.

The goal of this system is to improve the reporting of payroll (including superannuation) information to the Australian Tax Office.  Please note, it does not impact your payment obligations.  You still pay your employees the same way, but there are some changes.

SoftwareWhat is being reportedActivity StatementsYear End
Each payroll software provider is making changes to their systems to comply.  It is worth checking with them and making sure your software is updated at least by March / April 2018 – per the ATO’s industry consultation timeline. 
  • salary, wages to an employee
  • remuneration to the director of a company
  • salary, wages to an office holder
  • a payment to a religious practitioner
  • return to work to an individual
  • termination of employment
  • unused leave
  • parental leave pay
  • dad and partner pay
  • salary, wages to an employee under the Seasonal Labour Program.
The interface to the ATO’s systems will see the W1 and W2 labels of the Income Activity Statement (IAS) populated for you.
You will need to mark a payroll at the end of the year as ‘final’ or ‘finalised’, which will then pre-populate the information that is normally in the Annual Payment Summary into each person’s tax return.  This will remove the need to produce the Annual Payment Summaries as the ATO expects that people will log into their MyGov account to obtain that information.  This is an important point to communicate to employees.

As the deadline for compliance gets closer, we will update this post.  You can also check the updated information on the  ATO Website.

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