Single Touch Payroll

Single Touch Payroll

The world is moving into real-time reporting to the Tax Office for Salary and Wages, PAYG-W and Super Payable. Everytime you process a payroll entry your software can now report it directly to the Tax Office. From 1 July 2018 this will be compulsory for businesses with over 19 employees and optional for those with less than 20 employees. Are your systems ready for this? Contact us now if you need help getting your systems up to date.

Commencing with effect from 1 July 2018, employers who have 20 or more employees will need to report payments such as salary and wages, PAYG withholding and superannuation directly to the ATO from the employer’s payroll solution as and when employees are paid.

The measure will be extended to smaller employers with effect from 1 July 2019.

This will be known as Single Touch Payroll.

The critical date for most practical purposes is 1 April 2018 as employers will need to do a headcount of their employees on that day. If there are 20 or more employees on 1 April 2018, Single Touch Payroll reporting will be mandatory for the quarter commencing 1 July 2018.

In doing the headcount you will need to include:

  • Full-time and part-time employees;
  • Casual employees who are on the payroll on 1 April and worked any time during March;
  • Any employees based overseas;
  • Any employee absent or on leave, whether paid or unpaid;
  • Seasonal employees who are engaged short-term to meet a regular peak workload, such as harvest workers. For this purpose, employers do not include any employees who ceased work prior to 1 April, casual employees who did not work in March, independent contractors, staff provided by a third party labour hire organisation, company directors, officeholders, or religious practitioners.

This change is designed to streamline business reporting and ultimately to ease the burden on taxpayers, tax practitioners, and the ATO.

However, it will require some work to ensure a seamless transition and those practitioners who are likely to be affected in the first tranche would do well to start investigating the issues that are connected with Single Touch Payroll now.

In particular, you will need to update your current payroll solutions to a version that is Single Touch Payroll enabled. Your payroll software or service provider will be able to tell you when this is available.

If you don’t have a payroll solution, you will need to choose one that is enabled for Single Touch Payroll reporting by 1 July 2018.

You can use a third party like a bookkeeper, BAS agent or payroll service provider to report to the ATO on your behalf through a Single Touch Payroll enabled solution, but this may lead to greater costs in providing that service.

As from 1 July 2017 there will be a limited release of Single Touch Payroll for a small number of employers with additional functionality being made available from October 2017.

The ATO have indicated that they will provide support and education on a timely basis in order to enable employers to transition to Single Touch Payroll with greater ease.