03 May 2018
Single Touch Payroll (STP) will change the way employers report to the ATO. It becomes mandatory for all businesses with 20 or more employees from July 1, 2018 and it is important you are prepared to ensure a smooth transition that doesn’t cause disruption for your business.
Under the new reporting method, you will be required to electronically report salaries and wages, PAYG withholding and superannuation information each time you pay your employees, directly from your payroll solution.
As a result, you will no longer be required to complete payment summaries at the end of each financial year.
This will not affect the frequency of your pay cycle or payment due dates for superannuation and PAYG withholding.
The initial roll out of Single Touch Payroll will be based on your employee count as of April 1, 2018. If you had 20 or more employees at this time, then you will need to adopt this new reporting method from July 1. For small businesses with less than 20 employees, the change is expected to be implemented from July 1, 2019.
Should you have 20 or more employees, you will need to ensure you have a payroll system that offers Single Touch Payroll. Some payroll software providers have this update ready now, or soon to be released. You even have the option to start reporting through STP earlier if your payroll solution is ready.
Both Xero and MYOB are working with the ATO to ensure their software will be ready for the changeover. However, certain versions of their software may not be 100% enabled and will qualify for a deferral.
In the case that the software solution you use will not be ready for the changeover to Single Touch Payroll, an application must be made to the ATO to defer to May 2019.
So, in summary, you need to:
- Determine whether your business’ number of employees on April 1 was 20 or higher
- Check when your payroll software will be updated to enable Single Touch Payroll
- Review and update your organisation details and all employee details, if required
- Commence Single Touch Payroll from July 1, 2018, with each pay cycle
- If software update is not available, request a deferral from the ATO
If you need any help getting ready for this change, or just have questions you need answered, then please get in touch . Or, click here to read more about AR Advisors’ payroll management service .