As of Sunday last week (1st of April, 2018), all businesses were required to count the number of current employees on their payroll. This is in preparation for the introduction of Single Touch Payroll (STP) updates by the 1st of July 2018. If you missed this deadline and haven’t counted your employees yet, you can base your head count on your most recent payroll details.
What is Single Touch Payroll (STP)? What Will Change?
The introduction of STP reporting means that every time you pay your employees, you will now be required to report on employee tax and super information as well. This information can then be accessed by the Australia Tax Office (ATO). If your employees have an account with myGov, this new reporting will also allow them to view their year-to-date tax and super information through the myGov website (https://my.gov.au).
To ensure that you are compliant, you must confirm that your current Payroll software includes the Single Touch Payroll (STP) update. Most Payroll software providers have already updated their products. This means that for most of you, the changes should happen automatically.
Note: The STP update shouldn’t impact your current payroll cycle. Therefore, you can continue to pay your employees weekly, fortnightly or monthly as preferred by your business.
Does this impact you?
The key question to ask is: Do you have 20 or more employees?
Yes – You are considered a Substantial Employer.
Please follow the steps below:
- Talk to your payroll software provider as soon as possible to determine that your current payroll solution is ready for Single Touch Payroll (STP) by 1 July 2018.
- Confirm that your current software allows you to start reporting staff tax and super information to the ATO as part of your normal payroll payments.
- If your current payroll solution doesn’t offer Single Touch Payroll, you will need to change to a provider who does.
If you are unsure or confused about any of the steps above, don’t worry! We can help you through the process. Give your accountant a call or contact Knox Taxation reception on (03) 9762 7344.
No – You have 19 or less employees.
Please follow the below steps.
- You don’t need to worry about changing anything for 2018.
- However, Single Touch Payroll (STP) is likely to become mandatory after the 1st July 2019 – subject to relevant legislation passing in parliament.
- If the legislation is passed, you will need to make sure that your current software/payroll program includes the STP update alike the larger businesses mentioned above.
- If your software has the update and is ready before the 1st July 2019 you can start reporting before that deadline with no concerns.
Businesses who are considered to be substantial employers (20 to 20+ employees) are required to report through STP from the 1st July, 2018. Once your business has been labelled as a Substantial Employer, you must continue to report through STP, even if your employee numbers drop below 20 people.
Which employees should be included in your headcount?
- Full-time and Part-time employees
- Casual employees (who are on your payroll as at 1st of April and have worked anytime in March 2018)
- Employees based overseas
- Any employee who is absent or on leave (paid or unpaid)
- Seasonal Employees
What are the best ways to report through STP?
As per the Australian Tax Office’s (ATO) website, you can report via one of the following:
- Report from your current payroll solution/software when it is STP-ready
- Choose an alternative payroll solution which is STP-ready. We can help you with this!
- Ask a third party, such as us (your accountant) to report through STP on your behalf.
Further Information
For more information on the Single Touch Payroll (STP) update, visit the ATO website via the following link. If you have any further questions feel free to call us on (03) 9762 7344 or discuss further with your accountant.
