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Here’s what you need to know about Single Touch Payroll

The new Single Touch Payroll system requires employers to report information with every pay run.
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Here’s what you need to know about Single Touch Payroll

Here’s what you need to know about Single Touch Payroll

4 July 2018

On 1 July 2018, the Australian Taxation Office (ATO) launched Single Touch Payroll (STP). The new system requires employers to report information such as salary and wages, pay as you go (PAYG) withholding and superannuation details, with every pay run. STP allows direct connection to the ATO. If your operating systems are outdated, they will require an update.

Are you single touch enabled?

Businesses with over 20 employees are now required to report through a Single Touch Payroll-enabled payroll system. You can also ask a third party, such as tax accountants or payroll service providers to report on your behalf.

“Single Touch Payroll is the biggest payroll reporting change in Australia’s history,” says Mike Rich, co-founder of Attaché Software.

“Reporting must be done electronically to the ATO with every pay run. It is this direct digital connection to the ATO that is new and requires all payroll systems to be upgraded to accommodate it.”

Key things to know for employers

Questions to ask your service providers

  • When will your payroll solution be ready for STP?
  • If they offer multiple payroll products, where does your solution sit on their priority roadmap?
  • If they are rationalising their product offerings and pushing you onto another product, will the functionality on the accounting side be as good, if not better than what you have now?
  • If they have a deferred start date, find out when it is. If you are unable to get ready by that date, you will need to apply for your own deferral as well.

Payroll processes impacted by STP

  • Pay day: submit a ‘pay event’ to the ATO on or before pay day for your employee salary or wages
  • Employment commencement: start dates and tax file numbers (TFN) of your new employees are to be reported in a ‘pay event’
  • Ceasing employment: report the cessation date of your employees in a ‘pay event’
  • End of year: make ‘finalisation declarations’ via STP reporting at the end of each financial year

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