Single Touch Payroll – so what is it exactly?
Data has become enormous and readily available allowing us to assess at any given moment how our businesses are performing, what our strengths are and where we can make improvements. The leverage and potential this data allows us is crucial for today’s businesses to survive and thrive.
Of course due to the streamlining and availability of data you may or may not be aware the steps that the ATO have also taken to date in this space is staggering. They’ve revamped their use of data right down to the way they access and deliver data and one of these latest revamps is the Single Touch Payroll.
Single Touch Payroll (STP) essentially reports anything you pay to your employees directly to the ATO. This includes information about your employees’ salaries and wages as well as any allowances, deduction, pay as you go withholding and finally superannuation.
But what does STP reporting mean and achieve?
What’s the point?
It means that Payment Summaries are no longer required to be generated every year! In fact the ATO will do this for you and provide to your employees through their MyGov accounts. No more employees calling for their Group Certificate in July & August!
So when does STP come in?
As of 1 July 2018 STP reporting will become mandatory for businesses with 20 or more employees, however it will encompass all businesses, i.e. those with 19 employees or less as of 1 July 2019, so it is important that steps are taken to ensure we are ready to comply with the ATO’s new reporting requirement.
Great, but what do you need to do?
If you’re using a software provider for keeping your records it is likely that you’re already ready to go or will be with a new update! The beauty of software and indeed cloud computing means that the complexities are taken out of your hands and made available to you directly so that all you need to do is click a button.
If you’re not sure whether your software provider has implemented STP reporting yet, simply Google your provider and “STP” to find an update and or instructions as to how the STP reporting will work in the software. We recommend that you subscribe to your software providers communications as this will be the most efficient way for you to be notified of the STP reporting changes.
So how do you know if you’re required to do this at 1 July 2018 or 1 July 2019?
It’s as easy as a head count. As of 1 April 2018 you’ll need to determine how many employees you had, including full-time, part-time and casual employees. It is important when performing this count not to include the following:
– employees who ceased employment before1 April
– casual employees who did not work in March
– independent contractors
– labour hire staff supplied by a third party
– company directors
Further and perhaps more importantly you need to make sure that your employees are:
a) being paid correctly;
b) super entitlements are being calculated correctly; and
c) employee details such as addresses, names and date of birth are correct.
Once you’ve determined which period you fall into it’s important that you ensure that everything is in place to meet the STP reporting. If you don’t think this is possible or are unsure of the process, please get in touch with us and we will work with you to ensure you’re ready!
If you’d like to read further information on STP reporting and what it means for you please refer to the ATO website.
Author: Jessica Pol