What is Single Touch Payroll and what do I have to do?
The Australian Tax Office (ATO) is implementing Single Touch Payroll (STP), a more regular and streamlined way of receiving payroll and superannuation data from employers.
Employers currently report Pay As You Go (PAYG) withholdings via their Business Activity Statement (BAS) but under the new STP, this information will be submitted to the ATO via your payroll software or payroll service provider.
HR3 will be providing updates to STP at our End Of Financial Year (EOFY) training courses in Melbourne, Sydney, Perth and via webinar. You will receive invitations to attend these courses very soon.
With over 30 years’ experience providing payroll software, you can rest assured that HR3 is on top of all the required reporting and are here to help. This blog explains Single Touch Payroll and what your new responsibilities will involve.
In short, the ATO will receive tax withheld data, payroll data and superannuation data on a pay event basis throughout the year instead of your current regular period-based reporting and Annual Payment Summaries.
This means that businesses will be interacting with the ATO each pay event which will require a new discipline in keeping payroll tidy all year round! To facilitate this increased reporting, businesses will be expected to purchase or upgrade their payroll software to comply.
The move signifies an effort by the ATO to make the Australian tax system smarter, more automated and more efficient. The ATO is predicted to receive 100’s of millions of pay events per annum via the STP gateway.
What will happen to our payrun process (for businesses with 20+ employees)?
For every pay event from 1 July 2018 employers are obligated to submit employee salary or wages, PAYG withholding and superannuation amounts to the ATO via an STP enabled payroll solution.
The ATO is in the process of readying their systems to accept STP data from employers by 1 July 2017, however there is no obligation on employers to commence using STP from that date. Currently, payroll software developers, including HR3, have yet to receive all the final specifications for STP.
There will be no changes to the way employers pay their superannuation, however, when those payments are made to employee’s funds, the information will be reported to the ATO. At this time the responsibility to provide this reporting line is undecided.
What are the advantages of STP?
One of the advantages for employers is that they will not need to perform an annual reconciliation to the ATO or provide annual pay summaries to employees. In addition, the STP data you provide will allow the ATO to pre-fill the BAS PAYG amount.
For employees, the ATO’s myGov portal will be updated with the tax and superannuation details that you report by STP. This means that, via their myGov account, employees will have access to more information in a more timely manner.
Will HR3 payroll software support STP requirements?
Customers can rely on HR3 to be compliant with STP obligations. We have a consultative relationship directly with the ATO and the Australian Business Software Industry Association (ABSIA). We are working within specialist interest groups to provide input and feedback on STP developments. Currently, our internal software developers are preparing HR3’s software in readiness for STP capability.
What happens next?
Employers with 20 or more employees will be able to report to the ATO via STP from 1 July 2017, however they will not be required to do so until 1 July 2018.
At this stage, the requirement to report via STP from 1 July 2018 does not apply to employers with 19 employees or less.
When STP is up and running, I believe we won’t look back. Naturally, there will be teething issues but on the whole, we will all benefit from a smarter, more efficient, more automated system.
HR3’s EOFY training courses in Melbourne, Sydney and Perth, backed up with web based training will provide further details and updates to keep you up to date on all that is STP.
Thank you for trusting HR3 as your payroll software provider. I look forward to providing you with software to help you through the introduction of STP.
Michael Benyon – COO