Single Touch Payroll (STP) will change how employers report PAYG and super information to the ATO.
STP requires employers to report payments such as salaries and wages, pay as you go (PAYG) withholding and super information at the same time you pay your employees.
It will affect businesses with twenty employees or more and you have to be ready to implement the new processes by 1 July 2018. If you have less than 20 employees, then you’ll have until 2019 to get ready.
Here’s a rough timeline below:
If you’re using Hero Payroll, then STP compliance will be automatically rolled out for you. We’ll update you on exact details ahead of 1 July 2018.
In the meantime, here are some other things to consider to get Single Touch Payroll ready:
1. Select your Single Touch Payroll Champion
Choose someone to be the STP expert in your business. They can help by being responsible for managing the change and ensuring the business is up-to-date.
2. Start to put the key ATO processes in place
Visit the ATO website and make sure your business has:
We’ve also published a list of handy hints to start getting ready for STP.
3. Check your data
Now is a great time to check your data is correct in the following areas:
Check PAYG withholding is calculating correctly and all the information captured is correct.
Check your superannuation contributions are calculating correctly, your SuperStream solution is compliant and you have the correct employee and superannuation funds set up.
- Employee master files
It’s crucial that payroll records match the ATO. Ensure employee data is up to date and correct (such as full name, address, tax file number and date of birth)
4. Review your business processes
As well as double-checking your data, it’s also a good time to double-check your processes.
- Make sure the right people in your business know about STP – especially your payroll staff.
- Check if you are paying your employees correctly.
- Check if you are addressing overpayments correctly.
TIP: You will not need to provide payment summaries to your employees for the payments you report through STP.
Employees will be able to view their payment information in ATO online services, which they will access through their myGov. Your employees can also request a copy of this information from the ATO.
To be exempt from giving payment summaries, you will need to make a finalisation declaration.
Under STP, there are a number of withholding payments that are either mandatory, voluntary or that cannot be reported. Visit the ATO website so you know how to handle these types of payments and ensure that you have processes in place to deal with these obligations.
5. Communicate these changes to your employees
STP has been designed to help created transparency and make life easier for your employees. To unlock the full potential of STP, they will need to take a few steps too. Talk to your employees about:
- Registering on myGov. Step-by-step instructions can be found on the Department of Human Services website and they can access a range of government services.
- Provide helpful hints of what they’ll need to set up on myGov like their TFN and bank account details. This can add real value to their experience and help speed up the process.
- Put managers through the process first so they can help their teams and reduce the effort involved.
6. Apply for more time if you need it
Even though Employment Hero will have the technology for STP ready to go by 1 July 2018, we know some employers may not be ready to launch.
We recently ran a live webinar on Being Single Touch Payroll Ready, which you can watch on-demand here.
Employment Hero is an all-in-one HR and payroll system, built to facilitate employee engagement for small to medium sized businesses. Your employees will have access to our marketplace of specially curated employee benefits from Australia’s leading insurance companies. Request a demo today.