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single touch payroll

Getting Your Business Ready for Single Touch Payroll

The Australian Taxation Office (ATO) has confirmed that Single Touch Payroll will be rolled out from the middle of next year. For companies that employ more than 20 staff, Single Touch Payroll implementation will be required by July 1st 2018. For those companies with under 20 employees, the date is July 1st 2019. All businesses will be required to provide a headcount to the ATO by April 1st 2018. The introduction of Single Touch Payroll will significantly impact the way in which your business reports to, and interacts with, the ATO.

What is Single Touch Payroll?

In a nutshell, Single Touch Payroll is a change in the way businesses report their PAYG and super contributions to the Australian Taxation Office. It will become the new standard for payroll reporting nationally. Essentially, the ATO will now have real-time access to payroll details, as opposed to a once or twice annual update. Each time you complete a pay run, the details will be forwarded to the ATO.

Presently, businesses only need to report PAYG and super contributions to the ATO on a monthly or quarterly basis. Single Touch Payroll Reporting will now require businesses to report these details at each “pay event”.  A “pay event” occurs each time an employers credits money into an employee’s bank account, along with a generated pay slip.

Following STP guidelines, at every “pay event”, the following details are provided to the ATO, for each employee remunerated:

  • year-to-date total wages accrued and tax
  • superannuation contributions up to that point

Complete Payroll Transparency and Compliance

One of the main reasons for these new reporting standards is to encourage transparency and compliance within businesses. Over the past year, there have been many high-profile cases of large and small businesses not operating their payroll in compliance with modern awards. Many large fines have been issued by Fair Work to such businesses. STP reporting aims to encourage companies to keep their payroll compliant, knowing that the ATO will be able to examine it at any moment.

Within the first 12 months of the rollout, there will be a penalty exemption as businesses find their feet with the new processes. However, after this 12-month period, failure to meet the reporting requirements will attract penalties. Furthermore, if the reporting shows non-compliance with payment and super contribution regulations, this will also attract penalties.

How do I prepare my business?

There are a few key steps to take to ensure that your business is ready to implement and operate Single Touch Payroll on time.

  1. Payroll software

    If your business is already operating a payroll software, it’s smart to have a chat to them now regarding STP implementation. Make sure that your provider has prepared themselves to update their software, and general reporting habits, to support the regulatory changes. Any reliable payroll service should already be across these pending changes, and be in the stages of updating their systems.

  2. Review your risks now

    Due to the close deadline of the changes, reviewing your current procedures for payroll reporting – such as superannuation allowances, PAYG, and turnaround times – is recommended. If you aren’t currently outsourcing your payroll, or operating a compliant payroll software, now is a good time to make the switch. The Australian Taxation Office has made a recommendation to find a compliant payroll solution as soon as possible. This is the simplest way to ensure that you’re operating in compliance with STP reporting regulations.

  3. Evaluate HR procedures

     

    Ensure that you’re running in compliance with modern awards, and that your employees are being treated fairly, and remunerated the correct wage.

 

Single Touch Payroll Reporting changes will roll around in no time at all, so it’s important to be across them now. Ensuring that your current payroll service will be operating in compliance with these changes is crucial to increase transparency and avoid penalties. Roubler has already taken the required steps to update its software to be ready for Single Touch Payroll capability. The ATO are releasing more information regarding software in the coming weeks, and Roubler will incorporate this information accordingly to ensure that all of our clients pay runs are completely in compliance with regulations.

 

 

Image Credit: LBD, Vixen
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