Single Touch Payroll (STP)

Single Touch Payroll

Have you thought about how you will prepare?

Single Touch Payroll (STP) is mandatory for employers of 20 or more employees from 1 July 2018, and will most probably become mandatory for all employers by 1 July 2019.

Early implementation of the Single Touch Payroll regime can provide your business with efficiencies for reporting tax and superannuation information to the ATO.

WHO:

If you have 20 or more employees (make a headcount of employees on 1 April 2018)

WHEN:

Check existing payroll system / or Implement software before 1 July 2018

WHAT:

Required to use Single Touch Payroll (SBR enabled) software which reports directly to the ATO with every pay cycle.

HOW:

Contact KSR for advice, and click Single Touch Payroll for further resources

REQUIREMENTS:

If you have 20 or more employees, then from 1 July 2018, you will be required to start using Single Touch Payroll SBR-enabled software which reports directly to the ATO with every pay cycle. Your payroll software must report the following details:

• Each employee’s name and tax file number (TFN)*

• Gross amount paid

• Tax withheld on the Gross

• Ordinary time earnings for the period, and

• Any superannuation guarantee obligations.

*Note: The software will be designed so that the employee’s tax file number will be hidden from your payroll staff for security purposes.

BENEFITS:

The ATO will then advise you monthly, or quarterly as applicable, the correct amount of PAYG tax withheld for payment in your activity statement. Also, there will be quarterly information available regarding your superannuation obligations to pay either the ATO clearing house or via your independent provider.

As part of the new regime, the reports and liabilities owing will be available to you in real time. This means that, if you wish, you will be allowed to make payments towards PAYG tax withheld and superannuation contributions in your pay cycle before the legislated due date.

PAYROLL READNIESS:

If your payroll system is already automated with reports that can provide the ATO required information (listed above) each pay cycle, then your system may just need an update to become SBR-enabled.

But, if your in-house system is still manual it is now time to discuss and review your internal processes. The STP regime is mandatory for employers of 20 or more employees from 1 July 2018, and will most probably be mandatory for all employers by 1 July 2019. The impact on manual processes will likely be greater than STP-ready software systems.

PAYROLL PROVIDERS:

You can get a third-party provider- like a tax professional or payroll service provider – to report to ATO through Single Touch Payroll on your behalf.

Payroll and service providers are updating their products and services ahead of 1st July transition. They should let you know when they become Single Touch Payroll-enabled, but please contact your provider directly if you have concerns or questions.

KSR CAN HELP:

KSR advice is to become STP ready as soon as possible to avoid any difficulties on 1st July.

Our team of Bookkeepers and Accountants is available with practical advice and assistance:

• Looking for an STP solution, using a manual system and thinking about upgrading? Contact KSR to discuss which accounting software could best suit your business needs

• Happy with your current accounting software, but need advice whether it is STP compliant? We can do that too

• Check that your business is correctly calculating and recording taxes, super, staff leave, and entitlements

• Assistance with business HR and IT processes which may need to change

RESOURCES:

ATO Single Touch Payroll Page

How to Count your Employees

Employer Checklist

Information for Employees

Software Developers – STP Readiness

Xero Accounting Software – home page

Xero STP Blog

KSR are here to support and guide you through the process

Please do not hesitate to contact us for advice

The Team at KSR