Single Touch Payroll – April first is no joke!

Stay up to date with Single Touch Payroll

The 1st of April 2018 is no laughing matter for many employers around Australia. For this year, it is the day that an employee headcount must be done to determine if they must comply with Single Touch Payroll from 1 July 2018, or if they have the option of deferring compliance an extra year to 1 July 2019.

Single Touch Payroll is a significant change to how salary, wages and superannuation data is collected by the Australian Taxation Office, as they will now be recording most of this information ‘live’, at the time employees are getting paid (or for each “pay event”).

It is important to note that there is currently no change to due dates for lodgement and payment of activity statements or superannuation guarantee. It is just additional data collection. Employers will need to make sure they are using payroll software/providers that are Single Touch Payroll compliant.

The headcount on 1 April is centered around whether or not a business has 20 employees or more. If a business has 20 employees or more on 1st April, then they must comply from 1 July 2018. If they have 19 or less, then they must comply from 1 July 2019. In either case, an employer can opt into the system earlier. They will need to do a full year to date reconciliation for the first report of data though.

The employee headcount is based on the number of employees and not anything else like full time equivalents. Broadly speaking, it includes all full time, part time and casual employees and does not include contractors. It doesn’t include casual employees that did not work in March 2018 though. Grouping will also apply to wholly owned companies.

One of the benefits of Single Touch Payroll is that if used correctly it will eliminate the need for the employer to issue an annual payroll summary.  Furthermore, some software will also streamline on-boarding administration for TFN and superannuation details, meaning additional payroll related efficiency. For some businesses it could also trigger a necessary upgrade to more efficient payroll software.

Key Dates & Actions

NOW

  • Review payroll software/systems for compatibility

1 April 2018

  • Headcount of employees
  • Determine which mandatory compliance date applies – 1 July 2018 or 2019

1 April – 30 June 2018

  • Decide if voluntary reporting is taken up for 30 June 2018 year
  • If voluntary reporting is being done, select time to enter system and reconcile YTD amounts to include in first report
  • Implement any required software and system changes
  • Review employee records to ensure they align with ATO records – names, dates, TFNs, addresses

1 July 2018

  • Mandatory for 20 or more employees

14 August 2018

  • Extended lodgement date for first year of STP reporting. Normally it needs to be finalised by 14 July.
For further information on how your reporting will change or information on how to count your employees, you can seek assistance on the ATO website.
For a more specific discussion on how it can impact your business, please contact one of our Tax Specialists by completing your details below or give us a call on (03) 9835 8200.
About the Author
Daniel Arnephy
Daniel is our technical expert for all your taxation needs. His diverse network and client base allows him to continuously build his knowledge and analyse every situation he is faced with an experienced outlook.
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