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Payroll – Single Touch Payroll

The article provides an update on the implementation of the Single Touch Payroll (STP) regime from 1 July 2017.

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Further to our articles Payroll – Single Touch Payroll and Payroll – the Advent of Single Touch Payroll in the May and November 2016 newsletters, as 2017 gets underway, it is timely to consider what may be necessary to prepare for the commencement of the Single Touch Payroll (STP) on 1 July 2017.

The legislative framework was enacted on 16 September 2016. The new measures are contained in Schedule 23 to the Budget Savings (Omnibus) Act 2016. The Bill as enacted (Act No. 55 of 2016) and the Explanatory Memorandum (see Schedule 23) are both available here.

What is Single Touch Payroll?

As previous updates have reported, STP is a new reporting system which will require ‘substantial employers’ (that is employers which employ 20 or more employees) to mandatorily electronically report in real-time — using Standard Business Reporting (SBR)-enabled software — payroll and superannuation information, including ordinary times earnings, PAYG withholding (PAYGW) and superannuation guarantee (SG) data. Employers will have the option of making real-time payments, but this will not be mandatory.

Employers will have the option of reporting to the ATO through STP from 1 July 2017, but it will be mandatory from 1 July 2018 for any employer that, on 1 April 2018, employs 20 or more employees.

The ATO has advised that employers with fewer than 20 employees will be able to report to the ATO through STP from 1 July 2017; however, it is not a requirement at this stage. ATO will be running a pilot program with small businesses soon which will allow the Government to explore the benefits of STP for small business.

Further, employees will have access to pre-filled forms including TFN declaration and super choice when they start a new job. This will be accessed through their myGov account.

SBR-enabled software

In order to use STP, employers will need to have SBR-enabled software, which will require employers to either upgrade existing software or purchase new software. Following consultation, the Government decided not to proceed with a proposed $100 non-refundable tax offset to businesses with a turnover of less than $2 million to acquire or upgrade SBR-enabled software during 2017–18.

The ATO is currently working with payroll solution providers to ensure their products are upgraded for STP reporting from 1 July 2017.

The ATO will be providing regular information on the progress of STP. TaxEd will continue to make sure employers are aware of their obligations, and provide support to help you to transition to STP reporting.

Complimentary webinar

TaxEd is pleased to provide all TaxEd subscribers with complimentary registration at our upcoming webinar — Single Touch Payroll – implications for Government and the Not-for-profit sector — to be presented by John Shepherd, Assistant Commissioner – Single Touch Payroll and SuperStream Program, ATO, on Monday 13 February 2017 at 2.00pm–3.30pm (AEDT).

Further details and registration information is available here.

(Note you are also welcome to refer the invitation to register for the complimentary session to other Government and Not-for-Profit employees who you anticipate might be interested.)

Disclaimer: This article is based upon information available as at the time of publishing and may be subject to change.