Single Touch Payroll (STP) is a way of electronically sending tax and super information to the ATO each time you pay your employees. For employers of 20 or more employees, this was compulsory from 1st July 2018.
On 12th Feb 2019, parliament passed legislation to extend STP to ALL employers effective 1st July 2019.
What does this mean for you?
This means the details of all salaries and wages payments made on or after 1st July 2019, must be electronically uploaded to the ATO either on or before the date paid to the employee.
- Your payroll cycle will not change. You can still pay your employees weekly, fortnightly or monthly.
- Your payment due date for PAYG withholding and super contributions will not change. However, you can choose to pay earlier.
- When you report to the ATO through Single Touch Payroll, your employees will be able to view their year‑to‑date tax and super information through myGov.
- If you have recorded all payments through STP then you do not have to provide your employees with a payment summary at the end of financial year as the ATO will make that information available to employees through myGov. There are still end of year processes required but it can all be done through your STP upload.
- In time you will also have the option to invite your employees to complete Tax file number declaration, Superannuation standard choice form and Withholding declarationonline.
Deferrals and Exceptions
The following groups are under further consideration by the ATO
- Micro employers (those with less than 4 employees)
- Closely Held entities (only family members employed)
- Companies who only employ Directors paid annually
- Employers disadvantaged by lack of access to digitial technology
Note: the ATO is currently working with practitioners and small business owners to better describe and understand the needs of these segments. The aim is to develop more tailored solutions for these segments
How do I get ready?
1.Talk to your agent
- If you have a third party processing your payroll, they can report to the ATO on your behalf. Speak with them to ensure they are ready. You are also required to advise the ATO that you have granted your Registered Agent access to manage your STP for your business.
- If you are Registered Agent providing a payroll service then refer https://www.ato.gov.au/Business/Single-Touch-Payroll/Registered-agents-providing-a-payroll-service/
2.Talk to your software provider.
- If you process payroll yourself using a registered payroll / accounting software, then contact your software provider for instructions on how to enable STP as this is not automatic. Plus you need to advise the ATO that you will be processing STP yourself, and provide them with your Unique Software ID number, otherwise referred to as their SSID number.
- For ATO instructions for Reporting through STP please refer https://www.ato.gov.au/Business/Single-Touch-Payroll/Report-through-Single-Touch-Payroll/
3. Not currently using payroll software – don’t be alarmed. The ATO is not insisting you purchase software.
- The ATO put out a market request for product proposals to offer low-cost STP solutions. Many companies have replied.
- The solutions are required to be affordable (costing less than $10 per month), take only minutes to complete each pay period and not require the employer to maintain the software.
- These solutions will best suit micro (with one to four employees) who need to report through STP, but do not currently have payroll software and may include mobile apps, simple reporting solutions and portals.
- More details will be available closer to the time
Please refer the below link for further information
Fresh HR Insights Pty Ltd have a Payroll Expert able to assist all our clients not only with payroll questions and Single Touch Payroll but also in regards to BOOT tests (Better Off Overall Test) – this applies when looking at paying increased annual salaries or increase hourly rates in lieu of paying the conditions in an award (Award Flexibility)
The BOOT requires every existing and prospective award covered employee to be better off overall.
The BOOT involves the making of an overall assessment as to whether an employee would be better off under the Employment flexibility agreement, which necessitates identification of the terms in the agreements which are more and less beneficial to the employee than under the relevant award.
The overall assessment required will essentially be a mathematical one where the terms being compared relate directly to remuneration.
The BOOT test essentially ensure that you are not underpaying an employee. We will be covering this in more detail shortly as we leaunch this as a new offering to Fresh HR Insights.