Single Touch Payroll Mandatory From 1st July 2018
The compulsory transition for businesses to use Single Touch Payroll(STP) is the most significant change to payroll in many years. From the 1st July 2018 all employers with 20 or more employees will be required to have single touch payroll. These are referred to by the Australian Taxation Office(ATO) as a substantial employer. This applies to any employer who has 20 or more employees as of 1st April 2018, or is a member of a wholly-owned group with 20 or more employees across all the members of the group as of 1st April 2018.
Employers with 19 or less will need to comply before 1st July 2019. There are quite a few things to know when it comes to single touch reporting, and we will try to cover them in this post. If a substantial employer drops below the 20 employees after April 1st 2018, they will still be required to be permanently on Single Touch Payroll.
What is Single Touch Payroll?
Single touch reporting is a simpler way for employers to report their employees information to the Australian Taxation Office (ATO). This new legislation being introduced from 1st July 2018 for businesses with 20 employees and over, will make sure the employers are reporting all employee payments such as wages, salaries, PAYG withholding along with superannuation information electronically when employees are paid.
With these changes in place, businesses will no longer have to complete payment summaries at the end of the financial year as it will be done for them.
For employees, payment information will be accessible through their myGov account. Employers will no longer need to give payment summaries to employees with the information automatically updated in myGov, as it will be previously reported through the Single Touch Reporting.
Who is included in single touch payroll?
From 1st July 2018, all employers with 20 or more employees will have to mandatory report to the ATO via single touch reporting.
What are the requirements, and how do we calculate our employees?
Included as employees
- Part Time Employees
- Casual employees who are on your payroll on 1st April 2018 and worked during March 2018
- Employees based overseas
- An employee absent or on leave (paid or unpaid)
- Full time employees
Not included
- Employees who ceased work prior to 1st April 2018
- Casual employees who did not work in March 2018
- Independent contractors
- Staff provided by a third party labour hire company
- Company directors, office holders or religious practitioners
The number of employees is based on the number of employees, and not based on the full time equivalency.
The rules of wholly owned groups with 20 or more employees across all the members of the groups applies to companies. Grouping rules do not apply to trusts, partnerships or sole traders.
What software uses Single Touch Payroll?
The following software will be compliant before the 1st July 2018 deadline for the switch to Single Touch payroll. Each of their websites has a guide to single touch reporting on their website. For any clarification or assistance you can contact us.
At Ace Business we can assist you in transferring your payroll over to Single Touch Payroll, with minimal fuss. We are Xero Payroll Certified and have the expertise to make the transition easy and painless. Call us today.
For further information about the Single Touch Payroll requirements, be sure to see the Australian Taxation Office website’s guide to STP.