Single Touch Payroll is only a touch away

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Nov 24, 2017 | Posted in Business Advice, Tax
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Single-Touch Payroll Reporting: Is Your Business Ready?

Single Touch Payroll Reporting (STPR) is a new system for businesses to report payroll to the ATO, and ensure compliance is up-to-date.

Under the STPR system, businesses will report on payroll, PAYG withholding and superannuation at the same time as they pay employees – whether that occurs weekly, fortnightly or monthly.

When will the new system start?

For businesses with 20 or more employees (deemed ‘substantial employers’) STPR will start on July 1, 2018. For businesses that have 19 or fewer employees, STPR will come into effect on July 1, 2019 (subject to the passage of legislation).

The first 12 months of STPR will be considered a transition period by the ATO, and most businesses will be exempt from penalties for late submissions during this time. This provides some leeway if businesses need extra time to get ready.

Exemptions from the new system may also be granted to businesses in remote regions with unreliable internet, or those that only have 20 or more employees on a seasonal basis.

The benefits of STPR for employers

STPR should provide several administrative advantages for employers.

For example, as real-time data will be available at the ATO, employers will no longer need to provide payment summaries to workers, either for a part-year or full-year of employment. Instead, employees will be given access to their payroll records online, such as through their MyGov account. Submission of the annual PAYG report will also no longer be required.

STPR should enable employers to keep on top of their reporting requirements at all times. In addition, if a business owner chooses to pay their PAYG withholding liabilities as they occur, rather than as regular lump sums, it may help them to even out their cashflow.

What businesses need to do

Employers will need to check their payroll software, and do a head-count of their employees as at April 1, 2018.

The total number of employees will need to include full-time and part-time staff members, and casuals who worked during March. Employees that are overseas, on leave or that are seasonal should also be included.

Those not to be counted includes independent contractors, staff provided by an outside agency, and casual workers who did not work during March. Company directors and religious practitioners will also be excluded.

What has changed?

The new system will bring about several specific changes for employers, such as:

· Employers will need to ensure the software they use or acquire has STPR capabilities.

· Reporting of wages and associated costs such as PAYG withholding and superannuation will be reported in real time.

· PAYG withholding will be reported on the STPR forms rather than on activity statements.

· PAYG withholding due on BAS reports will be pre-filled by the ATO.

· The option of paying PAYG withholding at the same time as STP reporting will be provided.

· Payment summaries to employees as well as annual PAYG reports to the ATO will no longer be required.

What hasn’t changed?

· The due date for payment of PAYG withholding will remain the same for employers that choose not to pay it at STP reporting time.

· Due dates for the payment of superannuation will remain the same.

· The figures reported can be corrected later if necessary.

How to begin the transition to STPR

Business owners that think they are likely to have more than 20 employees on their books next April should start preparing now.

This includes checking their payroll software will have STPR capabilities. Payroll software products can be checked on the ABSIA website through the product catalogue. Businesses that use a bespoke payroll software solution will need to speak to their software developer regarding enabling of single touch payroll.

But no matter the software, it’s important that all employers become acquainted with their new obligations, and start preparing for the coming changes.

What should I do next?

To help you prepare for the transition to STPR and to avoid penalties from the ATO due to non-compliance, please click on the link below for a flyer with more information about STPR which also includes a simple checklist.



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