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Single Touch Payroll (STP) has now passed through parliament.  It applies to businesses with 20 or more employees and a discussion paper is open for your feedback until 14 October 2016.  Have your say about the legislation here.

STP legislation requires a simple payroll report to be electronically sent to the ATO with every payrun.  Their system will check that the amount of superannuation accrued in that report reconciles with the amount you pay to a superannuation clearing house.  This is the primary reason for STP because believe it or not, there are still employers trying to avoid their SGC obligations.  There is also a significant amount of PAYG Withholding unlodged and unpaid to the ATO that will be made transparent.

The report we send will contain year-to-date figures only, so amendments to a previous payrun can still be included in the current report without triggering penalties.  The employer’s records will be considered the source of truth so we will not need to reconcile to the ATO’s records each month.

The headcount of 20 or more employees must be undertaken in April each year, and it applies to the number of people on the payroll, not full-time equivalent (FTE) roles.  If a business employs less than 20 staff they can still voluntarily comply, however once an employer is in the STP system they cannot leave it.

This is not landing on our doorstep straight away.  The first STP reports will need to be lodged by 1 July 2018, according to the headcount in April 2018.  Employers may voluntarily lodge their reports from 1 July 2017 if they wish to.  We expect current accounting software to develop their capabilities in line with this legislation so the report can be created and lodged to the ATO within seconds of completing the payrun.

Through STP we will also be able to file Tax File Number Declarations electronically, or employees may lodge them independently through mygov.  In the meantime we can use the smart pdf version of the TFN Declaration here.   This can be completed online but still must be printed, signed, mailed to the ATO and kept on file.

While Single Touch Payroll will open a more convenient, electronic platform for lodging TFN Declarations and reporting PAYGW and superannuation, it will also require tidy payroll processes and records – something to work towards in preparation for July 2018.

Amanda Wolff | Bookkeeper | The Money Edge | Bundaberg