Single Touch Payroll – What you need to know!
You may have heard about Single Touch Payroll recently and be wondering what you need to do to get ready for it. Rest assured PaysOnline have you covered and are currently developing our systems to be ready for the start of Single Touch Payroll from 1 July 2018.
What is Single Touch Payroll?
Single Touch Payroll is a reporting change for employers. It is an initiative being introduced by the Australian Taxation Office (ATO) to provide real time visibility over the accuracy and timeliness of organisations’ payroll processes.
It means employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the Australian Taxation Office directly from their payroll solution at the same time they pay their employees.
Ultimately, Single Touch Payroll will enable the ATO to determine whether employers have complied with PAYG withholding and Superannuation Guarantee Charge obligations. It is also likely to increase the amount of compliance activity (particularly for superannuation guarantee charge), as well as the speed at which the commissioner reacts to any breach of the requirements.
When does Single Touch Payroll start?
- For employers with 20 or more employees, Single Touch Payroll reporting starts from 1 July 2018. The first year will be a transition, and penalties will not apply.
- Single Touch Payroll will expand to include employers with 19 or less employees from 1 July 2019.
Features of Single Touch Payroll
- Streamlined reporting – Employers will be able to meet their reporting obligations to the ATO at the same time they pay their employees, instead of running a separate process.
- Pre-filled activity statements – Payments such as salaries and wages and pay as you go (PAYG) withholding amounts reported through Single Touch Payroll will be pre-filled into the employer’s activity statement, so they can easily see what has been reported (W1 and W2 labels). Employers will still have the ability to adjust or correct information in their activity statement. Large withholders will no longer have to report PAYG withholding through their activity statement.
- Payment summaries – Employers who report an employee’s payment and withholding details through Single Touch Payroll may not have to provide that employee with a payment summary at the end of the financial year. The ATO will provide this payment and withholding information to employees through myGov.
- View tax and super via MyGov – Employees can access their tax and super information through myGov as their employer transitions to Single Touch Payroll reporting. Over time, this will enable employees to more easily understand and manage their end of year tax position.
How does Single Touch Payroll benefit employers?
The main benefits for employers with single touch payroll are that it will streamline the process of reporting to the ATO by being able to submit payroll information at the completion of each payroll. By doing this, the ATO will be able to prefill the BAS (W1 and W2) for employers, eliminating potential errors and double handling.
How will this affect my payroll?
Nothing will change in how you process your payroll. The only thing that is tweaked is that after each “payroll event” your payroll provider will need to send some additional reporting information to the ATO.
If you’re not outsourcing your payroll to PaysOnline and need to be STP compliant, make sure to ask your vendor what steps they’re taking to update your products.
Want to know more?
The Australian Tax Office has also released a statement to clarify further details about Single Touch Payroll which you can find here – Setting the record straight on Single Touch Payroll.
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