What is it?
Real-time digital reporting to the ATO of detailed payroll information on or before each payroll processing date.
What does this mean?
From 1 July, "substantial" employers will need to report to the ATO as payroll is processed, not only at the end of the financial year as is currently the case.
A substantial employer is an employer with over 20 employees as at 1 April this year – and this includes casuals; those based overseas, absent and on leave; and seasonal employees: basically, anyone who has or will receive a Payment Summary, which may also include Directors.
Employers with 19 or less employees will likely need to commence reporting from 1 July 2019, pending legislation being passed in parliament.
Options for exemption are limited so we highly recommend you start acting now if you haven't already to ensure your processes comply. If you are eligible for an exemption, apply early: once the financial year has commenced no more exemptions will be granted.
Payments such as salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and super information will be reported to the ATO. If you have an outsourced payroll provider, you should check that they are testing their systems to ensure readiness.
What if an error is made?
You will be able to correct any errors you make in a later Single Touch Payroll (STP) report.
What’s in it for employers?
Smoother onboarding of staff through online TFN declarations and choice of super fund forms
TFN validation of employee details
There will no longer be a need to provide Payment Summaries to employees; they will receive this through their myGov account directly
What does it mean for employees?
Employees will need a myGov account so they can view up-to-date tax and super information, and receive their Payment Summary at the end of the financial year
New starters will be able to complete TFN declarations and choice of super fund forms online, and forms will be prefilled
What’s not changing?
At the moment there is no change to timing of PAYG and superannuation payments. Employers also still need to provide their employees with a payslip each pay period.
What do you need to do now?
Confirm your headcount as at 1 April if you are close to 20 employees
Talk to your payroll software provider or payroll provider if you outsource it - check they are ready and can manage reportable fringe benefits and reportable super contributions
Check the ATO's website to ensure you are prepared – they have a handy checklist to help you get ready
Know your process and what needs to be reported when
For more information visit the ATO website's Single Touch Payroll page.