Single Touch Payroll - Godbee Favero

Single Touch Payroll (STP) is a reporting change for employers and starts from the 1 July 2018.

Employers with 20 or more employees at 1 April 2018 must use standard business reporting-enabled software from 1 July 2018. The headcount for ‘20 employees’ includes full-time, part-time, casuals (who worked any time during March), employees based overseas, or on paid or unpaid leave. Directors and independent contractors are excluded from the count.

For businesses that are part of a wholly owned group, the total number of employees across the group is used (i.e., if the total number of employees employed by all member companies of the wholly-owned group is 20 or more, all group members must use Single Touch Payroll).

Single Touch Payroll is currently voluntary for businesses with less than 20 employees although proposed reforms seek to extend the reporting system to all employers by 1 July 2019, regardless of the number of employees.

What must be reported

STP requires PAYG withholding and superannuation contribution details to be reported to the ATO as payments are made to employees or superannuation funds.

When it comes to PAYG withholding, employers will report details of salary and wages paid to employees as well as the PAYG withholding amount at the time the payment is made to the employee. Employers have the option of paying the PAYG withholding liability at the same time, although this is not compulsory.

Payments that must be reported include:

  • Salary & Wages
  • Director remuneration
  • Return to work payments to individuals
  • Employment termination payments (ETPs) – not compulsory if the employee has died
  • Unused leave payments
  • Parental leave pay
  • Payments to office holders
  • Payments to religious practitioners
  • Superannuation contributions (at the time the payment is made to the fund).

The Government intends to extend STP to salary sacrificed amounts in the near future although these reforms are not legislated.

An end to payment summaries?

While not compulsory, employers can choose to include reportable employer superannuation contributions and reportable fringe benefit amounts. These payments are reported either at the time the payment is made or through an update event. If these payments are included, the employer will not need to provide payment summaries as employees are able to access their live data through myGov.

Actions

If you feel these changes will impact your business, you need to contact us to ensure that all you are fully prepared for when these changes come into effect on 1 July 2018.  We have a detailed checklist that we can run through with you to ensure the transition to an STP environment is smooth as possible. Contact us for more information.

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