Single Touch Payroll (STP) is the most significant change in reporting to the Australian Taxation Office (ATO) for businesses since the introduction of the GST in 2000.
STP will commence for substantial employers and those who elect to opt in from 1 July 2018 and the plan is (if legislation is passed) to roll it out to other employers from 1 July 2019.
Are you a substantial employer?
A substantial employer is classified as an employer who has 20 or more employees as of 1 April 2018 or
Is a member of a wholly owned group with 20 or more employees across all members of the group (including overseas) as of 1 April 2018.
Conducting the headcount
The headcount includes:
Part time employees
Casual employees who are on the payroll on 1 April 2018 and worked during March 2018
Employees based overseas
An employee absent or on leave (paid or unpaid)
Full time employees
The headcount does not include:
Casual employees who did not work in March 2018
Independent contractors
Staff provided by a third party labour hire organisation
Company Directors, office holders or religious practitioners.
There are specific exemptions for Employers who employed seasonal workers in 2018:
Reporting through Single Touch Payroll
Once you start reporting through STP enabled software you will be sending the ATO your wages, tax and superannuation information on or before each pay day. This is referred to as a “pay event”.
Payments are broken down into 3 groups:
Mandatory reporting
Voluntary reporting
Cannot be reported
Mandatory reporting includes the usual suspects such as payments to an employee, remuneration of directors, unused leave payments, parental leave pay.
Follow this link for a full list of payments:
You can voluntarily report:
A payments that is covered by a voluntary agreement
A payment under a about hire arrangement or a payment specified by regulations
A payment for termination of employment (ETP- death benefit)
Reportable employer superannuation contributions (RESC)
Reportable fringe benefits amount (RFBA)
Follow this link for a list of voluntary reporting items:
Payments that cannot be reported include:
Payments that are generally not paid through the payroll process
Payments made by payers to recipients that are generally not their employees such as
Department of Human Services
Investment bodies and managed investment funds
Purchasers of certain taxable Australian property.
Partnership distributions
Payments to suppliers
Follow this link for a full list of payments that cannot be reported through STP:
End of the payroll year
If you report all wage payments, including RESC & RFBA through Single Touch Payroll you will not be required to issue a payment summary to your employees at the end of the financial year or complete the usual payment summary annual report, rather you will complete a finalisation declaration to confirm that information lodged through the STP process is true & correct. The payment summary information will be available to your employees in ATO online services which will be accessed through myGov.
You are able to finalise individual employee information rather than the current process of completing a payment summary annual report for all staff.
What if I make a mistake when reporting?
The ATO has acknowledged that payroll is not always straight forward & there will be times where adjustments will be required after the STP report has been lodged.
Corrections can be made by:
Making an adjustment in the next regular pay cycle
Completing an update event
Full file replacement- to completely replace the latest pay event file lodged
IAS Reporting
You are required to continue to complete your monthly IAS. It is anticipated that the figures will be pre filled from 1 July 2018. You will have the ability to overwrite the prefilled figures if they are incorrect.
Opting into Single Touch Payroll during the year
You can opt in to STP at any time during the year by completing an update event.
Please call our office on 02 61969496 if you would like further information or assistance with your particular circumstance.