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What is Single Touch Payroll?
AN IMPORTANT MESSAGE TO ALL EMPLOYERS
Single Touch Payroll (“STP”) is a new compliance obligation for employers regarding the transmission of payroll information to the ATO (employee name, TFN, wages, tax and super).
To satisfy the Single Touch Payroll obligations, employers will either use their own payroll software or engage a third party (e.g. accountant) to send their employee’s tax and superannuation information to the ATO each time they run their payroll and pay employees.
An optional part of Single Touch Payroll is that employers will be allowed to make payments towards PAYG withholding tax at each pay cycle, rather than the ordinary case of paying when the Activity Statement is due.
Single Touch Payroll is either already mandatory (employers with 20 or more employees) or will become mandatory from 1 July 2019 (employers with 19 or fewer employees). There is a possibility some “micro-employers” (1 to 4 employees) or ‘those without reliable internet’ may have alternative options or exemptions; in any case you need to look into STP – call us to avoid doubt.
Employers using cloud accounting software likely already have a STP compliant payroll system. Such employers will need to ensure their payroll function is setup to comply with STP, if they have not already done so. After setup, processing of payroll will be fairly similar to the current procedure.
However, employers currently without a STP compliant payroll system need to setup new payroll procedures before 1 July 2019.
If you are like many Australian employers and unsure about how to meet the new and upcoming employer obligations with the Tax Office, we encourage you to call us today to discuss your options.