What is single touch payroll – are you ready?
Single touch payroll is a change in the way wages will be reported to the ATO. This is a legislative requirement in Australia that will be enforced on the 1st of July 2018 for all Australian businesses that have a 20+ employees, and for all remaining businesses from the 1st of July 2019.
Single touch payroll (STP) is being brought into play to enable total viability over your payrolls- ensuring that all employers are meeting their tax obligations.
So, what does this mean for your business and what should you do to make sure that you’re ready? We’ve answered some common questions below
How will STP affect my business?
There are a couple of things that will change with how your run your business with STP
- Real time reporting all payment events: this is inclusive of salaries, all allowances, reimbursements, deductions, PAYG & Superannuation. This reporting will be done through STP enabled software such as Xero
- Business Activity Statement: for small businesses both W1 & W2 labels will be pre-filled as of the 1st of July 2018. Larger PAYG withholders will no longer have to report their PAYG through the activity statement
What will happen to payment summaries?
STP will enable real time reporting to the ATO, so no more need for payment summaries. Your employees will be able to access this information through their myGov accounts
What if my number of employees drop below 20?
All businesses with 20+ employees as of the 1st of July 2018 will need to start STP reporting, even if the number of your employees drops below 20 throughout the year, you are still required to complete STP.
What do I need to do for STP?
There are a couple of things you should do in preparation of STP, and the best way to do this is with a full Payroll Audit, a service provided by Bigger Fish. Here is a small list of a couple of important items to check:
– Up to date Employee contact details
– Ensure that the Employee’s Tax File Number is recorded
– Cross check all Employees pay rates to ensure that they are compliant with industry standards
What are the Key dates for Single Touch Payroll?
So, those key dates are…
- 1st of July 2018- all employers with 20 + employees must commence STP
- 1st of July 2019- all employers Australia wide (with 19 or less) will commence STP
For more information, or to book in your Payroll Audit, feel free to contact one of our friendly staff at Bigger Fish.