Countdown to Single Touch Payroll: anything you require to ask

Single Touch Payroll (STP)
When: 1 July 2018
By: Australian Taxation Office
For: Employers with 20 or more employees

*The STP will apply to employers with 19 or less employees from 1 July 2019 – subject to parliament

Time is well and truly ticking as the countdown begins for larger businesses in Australia to get Single Touch Payroll (STP) compliant. Designed to streamline company reporting, the new scheme has the noble ambition of saving time and resources for companies at the completion of financial year, by requiring each pay run to be reported.

Come 1 July 2018, employers with 20 or more employees will have to send payroll advice to the Australian Taxation Office (ATO) at the same time as they typically pay their staff. This can be weekly, fortnightly or monthly, and includes anything from salary and wages, to PAYG withholding and superannuation. That said, businesses with 19 or less employees can further get on the front foot by voluntarily opting to get STP compliant this year.

So how can Australian businesses ensure compliance? Understanding how the new reporting requirement applies to your company can enable a smoother transition. Here are a few key considerations and important questions you should already have answers to.

  1. Communication is key

Get your staff over the changes fresh to ensure a smooth transition to STP.

  • Are your payroll and finance staff aware of the changes and receiving routine updates?
  • Do you have a plan for communicating the changes to employees?
  1. Understand your requirements

STP is an ATO requirement so it’s important to grasp the impact on your business.

  • Do you fathom the date of your company is required to report via STP?
  • Do you fathom about the STP employee headcount and cut-off date?
  • Do you fathom exactly who does and does not count as an employee for STP purposes?
  • How will STP and MyGov impact onboarding for your business?
  1. Assess your current payroll data

To avoid submitting inaccurate advice to the ATO when STP starts.

  • Is your PAYG withholding calculating correctly on your employee salaries and wages?
  • Are your employee superannuation payments calculating correctly via a SuperStream compliant solution?
  • Is your employee data accurate and up to date?
  1. Evaluate your current payroll solution

Review your current payroll process to ensure you are compliant when STP begins.

If you’re currently using accounting software…

  • Is your current payroll solution enabled for STP, or will it be?
  • Do you require to upgrade your payroll software?
  • What should you do if your software provider won’t be ready by 1 July?
  • How much time do you require to implement changes, if necessary?
  • Will there be costs associated with implementing STP?

If you’re currently using a third side service…

  • Is your third side solution using an STP compliant solution?
  • Will your third side solution lodge your STP stories to the ATO on your behalf?
  • Are there approvals required to facilitate the STP reporting process on your behalf?
  • Are there additional fees for the creation or lodgement of STP reporting?

If you’re currently using paper…

  • Do you have a plan to update your processes? Note: Reporting payroll manually will no longer be sufficient to remain compliant.
  • Will you switch to a payroll software provider or engage a third side to report on your behalf?

The move to STP is a significant one involving over 70,000 larger businesses, according to the ATO. However, it doesn’t have to be a hassle or challenge for individual employers to ensure compliance.

By following the simple checklist above and getting prepared sooner rather than later, businesses will stand to benefit from a smarter, more efficient system of payroll reporting that saves them valuable time and resources concurrently completion of financial year.

About the author

Alex Alexandrou, General Manager, Reckon

News Puddle Author

New Puddle broadcasts the latest news from around the world. Covering all subjects, we bring news when it's available to ensure you are consistently well-informed.

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