What Geelong accountants want you to know about Single Touch Payroll:
Imagine not having to prepare Payment Summaries for all your staff at the end of each financial year!
From July 1, the Single Touch Payroll process will be slowly implemented by the Australian Taxation Office.
Single Touch Payroll will be implemented for businesses with more than 20 employees from July 1, 2018.
This will then expand to smaller businesses with less than 20 employees on July 1 2019. However, this part is subject to legislation being passed through parliament.
What do you have to do to comply? When you process your payroll – whether that be weekly, fortnightly, monthly – you will be required to submit those details to the ATO. Accounting Platforms will have a “Submit to ATO” button within the payroll screen. This will vary depending on the software, but the basis will be the same.
“But, why?” I hear you ask. This process will allow you and the ATO to keep track of your superannuation guarantee obligations and help you stay up to date. It will also make it easier to lodge Payment Summaries at the end of the financial year- who doesn’t like efficiency!?
Single Touch Payroll will be able to be processed through your current software (such as Xero) as long as the software has been updated with the STP changes.
Fun facts to know:
- Numbers of employees will be based on a headcount made 1 April 2018.
- Directors are to be excluded from the headcount
- You do not need to notify the ATO of your employee numbers
- Numbers of employees include:
o Full time employees
o Part time employees
o Casual employees (who are on your payroll as of 1 April and worked any time in March)
o Any employee absent or on leave (paid or unpaid)
o Seasonal employees – this means employees who are engaged short term or have a regular workload).
- The ATO processes the information submitted within 2 business days
- Your pay cycle will not change due to Single Touch Payroll
- Employers can share the details with employees through myGov.
- In the future, this may eliminate TFN Declarations. All information is expected to be available through myGov.
If a business does not comply with the new ATO regulations surrounding Single Touch Payroll, the ATO will endeavor to assist them with the transition. If this fails, businesses may be subject to penalties, fines or even audits.
I bet you are reading this thinking – how am I supposed to lodge Single Touch Payroll without an Accounting Software?
If you need more information on this process, how it will affect you and your staff or have any questions, please feel free to contact your local Geelong accountants, Next Level Accountants, or visit the ATO website.