Single Touch Payroll is a reporting change for employers.
It means employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO directly from their software payroll provider at the same time they pay their employees.
Employers may need to update their payroll solution to report through Single Touch Payroll.
For employers with 20 or more employees, Single Touch Payroll reporting starts from 1 July 2018.
To find out if you need to be ready by then, you will need to do a headcount of the employees you have on your payroll on 1 April 2018(calculated by headcount and not merely full time equivalent)
If you have 20 or more employees on that date you will be a ‘substantial employer’ and will need to report through Single Touch Payroll from 1 July 2018. This is now law.
The Australian Government has announced it will expand Single Touch Payroll to include employers with 19 or less employees from1 July 2019. This will be subject to legislation being passed in parliament.
Right now the ATO are working with payroll software and service providers to help them get ready to offer Single Touch Payroll reporting for their employer clients.
When you pay your employees through your Single Touch Payroll-enabled solution you will be reporting payments such as their salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and super information to the ATO at the same time.
Your payroll cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly and you may have different pay cycles for different employees.
It simply means that when you complete your payroll, the tax and super information for each employee will be sent to the ATO, real time and in an electronic format.
You will be able to see which payroll solutions are Single Touch Payroll-enabled in the product catalogue on the Australian Business Software Industry Association (ABSIA) website. Over time, this catalogue will be updated with information about payroll solutions that are Single Touch Payroll-enabled.
Contact your payroll software or service provider to find out when your payroll solution will be ready for Single Touch Payroll reporting.
The more common software solutions (e.g. Xero & MYOB) are working on this currently with the ATO. So for those clients that have taken up our bookkeeping solution, please note you will automatically be compliant from the relevant date.
Transitioning to Single Touch Payroll
While many employers will start reporting through Single Touch Payroll from 1 July 2018, some employers will have a deferred start date. This may be because their software is not ready, or for other circumstances beyond their control.
Employers who are granted a deferral will start reporting during the financial year, rather than on the first pay after 1 July.
Your digital service provider will give you the information you need to support you when you transition to Single Touch Payroll reporting.
As more details come to hand on these changes we will inform you to ensure you are compliant.
