What is Single Touch Payroll reporting?
Single Touch Payroll software introduces a direct reporting link from computer payroll systems to the Tax Office. The purpose is to provide all necessary payroll information to the Tax Office at the time of running payroll software – transaction time – without having to subsequently or separately prepare and lodge reports.
The Tax Office is to receive all payroll data including wages, PAYG and super.
No more payment summaries
Reporting under Single Touch Payroll removes the requirement to issue payment summaries, payment summary annual reports and TFN declarations to the ATO.
Employees will have access to their to their information online via my.gov.au, and the Tax Office will also use the data to pre-load information for employees’ tax returns.
STP and payment summaries 2018
2017-18 income statements may not be available through myGov until 14 August 2018. Employers have until this date to finalise their STP data. For more on STP implementation arrangements see here.
The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 provides (inter alia) for the extension of Single Touch Payroll reporting to all employers from 1 July 2019.
Under the STP arrangements, accrued super contributions will be included in the data received by the Tax Office from the employer.
Super funds will report payment of the contribution to the ATO, which is intended to “create visibility of non-payment or late payment of super entitlements and enable the ATO to take prompt action”
Single Touch Payroll is compulsory
Single Touch Payroll reporting is mandatory for:
- Employers with 20 or more employees – from 1 July 2018
- (proposed) Employers with 19 or fewer employees – from 1 July 2019
Deferrals and Exemptions
In earlier information published by the Tax Office on its website, a “rural location with limited internet access” was given as an example of a valid reason for granting an exemption.
Subsequent information omits this example, but additional detailed information on the process and circumstances envisaged for both deferrals and exemptions and the forms to use has been published here.
Under the guidelines published there, deferrals for employers will be considered in circumstances which are “out of your control”, as well as including
- inability to get ready by software provider’s deferred start date
- transitioning to a new STP-enabled solution
- are using a customised payroll solution and you need time to configure and test
- have complex payroll arrangements and need additional time to transition
- have entered administration or liquidation
- have been impacted by a natural disaster
Registered agents providing a payroll service can also gain a deferral in “extenuating circumstances” as well as a range of software availability or capability issues.
Employers with seasonal workers
Employers with seasonal workers can gain exemption from reporting under STP for the 2018-19 financial year if both of the following apply:
- you had fewer than 20 employees at any one time for at least 10 continuous months out of the preceding 12 months (that is, from 1 April 2017 to 31 March 2018); and
- you reasonably expect to have fewer than 20 employees at any one time for at least 10 continuous months out of the 12 months immediately after 1 April 2018 (that is, from 1 April 2018 to 31 March 2019).
The envisaged circumstances for an exemption are limited in scope and duration according to information published here.
Single Touch Payroll is optional for who?
Voluntary use of Single Touch Payroll reporting can be commenced by any employer with access to complying payroll software, before the stipulated mandatory dates.
Single Touch Payroll Timetable
Source: ATO’s Single Touch Payroll update and other ATO published information
|Timetable for the introduction of Single Touch Payroll|
|July 2017||STP reporting limited functionality for a select number of employers|
|September 2017||ATO writing to employers with more than 15 employees|
|October 2017||Service providers starting to release software solutions|
|1 April 2018||Employers required to do a head-count to determine STP reporting obligation|
|1 July 2018||Single Touch Payroll mandatory reporting for employers with 20 or more employees|
|1 July 2019||(Proposed) Single Touch Payroll mandatory reporting for employers with less than 20 employees|
How to implement Single Touch Payroll
Implementation of STP reporting requires compliant upgraded payroll software.
The process and procedure for implementing STP by a business will therefore rely primarily on its payroll software, and any support available from the chosen software provider.
Software providers have been engaged by the Tax Office over some time in the lead-up to commencement, and according to the Tax Office compliant software solutions were being released from October 2017.
The following suggested STP-capable stand alone payroll software solutions (no affiliation) are worth checking out to see if they can meet your needs:
The legislation provides the Commissioner of Taxation with authority to specify a grace period for entities to make corrections to withholding statements.
The Tax Office has stated that the first 12 months Single Touch Payroll reporting will be a transition period, during which failing to report on time penalties will not be applied, unless the Commissioner of Taxation has first given the employer written notice advising that a failure to report on time in the future may attract a penalty.
What happens if employee numbers drop below 20?
Once you’re in the STP reporting arrangements, you have to stay in, regardless of employee numbers.
Seasonal workers, nothing to report
In keeping with the principle that STP reports are merely a reflection of payroll events, in the situation (such as highly seasonal activities) where no staff are paid, an STP report is not required.
Most well-known payroll software companies are already on track to provide compliant software in time for commencement of reporting, and will be/should be communicating with their clients. There’s also product register information and links here and the ABSIA software product register here.
- Notice to Employers with 15 to 30 employees
- Notice to Employers with 31 to 999 employees
- Notice to Employers with 1000 or more employees
- Streamlined reporting with Single Touch Payroll
- Single Touch Payroll Employers info pack
- Single Touch Payroll Associations and employers presentation
- Legislation link: Budget Savings (Omnibus) Bill 2016
This page was last modified 2018-09-14