What is Single Touch Payroll?
Single Touch Payroll is a change in the way employers will report their PAYG and super information to the ATO. Employers will now be required to report PAYG and super after a “pay event” – essentially after payroll has been processed – rather than previously reporting monthly or quarterly. In addition to PAYG, super information must now be reported, which previously wasn’t required.
If I make an error in a previous pay run and need to make adjustment, how will Single Touch Payroll affect me?
You can report the adjustment in next pay cycle OR as an "update event". Note that ATO require employer to report any error within 14 days of detection.
How does Single Touch Payroll benefit employers?
The main benefits for employers with Single Touch Payroll is that it will streamline the process of reporting to the ATO by being able to submit payroll information upon completion.
By doing this the ATO will be able to pre-fill the BAS (W1 and W2) for employers, eliminating potential errors and double handling. Additionally, the need to generate and distribute payment summaries may be eliminated for employees as this information will be made available online via myGov.
Finally, the ATO may allow employers to collect tax file declaration and super choice information online via myGov when onboarding new employees.
When will Single Touch Payroll come into effect?
For employers with 20 or more employees, single touch reporting will be mandatory from July 1 2018. For employers with 19 or less employees, it is expected that single touch reporting will be mandatory from July 1 2019.
It’s important to note that you need to do a “headcount” on April 1 2018 to determine if you have 20 or more employees. Even if you drop under 20 employees by July 1, you may still be considered a substantial employer and be required to use STP reporting, so it’s important that you perform a headcount in April.
How will this impact my payroll?
In essence, nothing will change in how you process payroll. The main thing is that after each “pay event” you will have to send some additional reporting information to the ATO. The obligation is on the employer to send information to the ATO – not the software provider. Although this process should be seamless, you (or your registered agent) will need to provide the authorisation to report this information to the ATO each payday through your software. So, if your software provider doesn’t support Single Touch Payroll by July 1 2018 and you employ 20 or more employees, you may need to look for another provider.
Will Employment Hero support Single Touch Payroll?
Yes, absolutely! Employment Hero’s implementation of STP is well underway. We will gradually introduce STP components into HeroPay platform. The first release of STP update can be found here. It goes without saying that everything will be delivered by 1 July 2018!
Will I still need to submit a BAS?
Yes – you’ll still need to submit a BAS, but the W1 and W2 values will be pre-filled
Will I be able to adjust the pre-filled values on my BAS?
Will I still need lodge employee tax file declaration?
Will I still need to submit an annual payment summary report?
If you use Single Touch Payroll reporting, you may not need to submit a payment summary report.
Will I still need to generate payment summaries for my employees?
Employers who report and finalise employee payments (and amounts withheld from them) throughout the year in line with their payroll process, will not need to provide corresponding payment summaries to employees to the ATO. The ATO will make that information available to employees through myGov. Refer to STP & Payment Summaries FAQ for more information.
HeroPay does not report the following payment types through STP: Foreign Employment Income, Death Benefit ETP, Employee Share Schemes. If your employees have these types of payments, you would need to generate paper-based payment summaries for these employees.
Can I make PAYG or super payments through Single Touch Payroll?
No, Single Touch Payroll is a reporting solution only. You will still need to make PAYG and super payments separately. If you use HeroPay, PAYG can be processed through an ABA file and super payments can be automated with ClickSuper.
Can I use single touch payroll even if I’m not required to?
Yes – if you’re an employer that has 19 employees or under and you want to use Single Touch Payroll, then you should be able to do so.
Can a bureau or payroll provider or registered BAS agent submit Single Touch Payroll data on behalf of a client?
Yes, bureau payroll providers and BAS agents will be able to lodge STP data on behalf of clients.
Where can I get more information on STP?
The best place is to check the ATO website