Single touch Payroll (STP) is the next of a series of Federal Government initiatives designed to streamline reporting obligations for employers and improve compliance with the Pay As You Go (PAYG) and Superannuation Guarantee (SG) systems.
The myGov service was launched in May 2013 to provide individuals with secure online access to a range of Australian Government services in one place.
SuperStream was phased in from July 2015 which has made the paying of superannuation contributions by employer more efficient.
STP will mean employers will be reporting tax and super information in conjunction with each ‘pay event’. Amounts reported will prefill on Activity Statements and due dates for payment will depend on whether the employer is a small, medium of large withholder.
- Withholds $25,000 or less a year
- Pays withholding amounts each quarter
- Reports withholding on activity statements each quarter
- Can arrange to receive monthly activity statements
- Withholds $25,001 to $1 million a year
- Pays withholding amounts each month
- Reports withholding on activity statements each month
- An individual or business that withheld amounts totalling more than $1 million in a previous financial year, or is part of a company group that has withheld more than $1 million in a previous financial year
- Amounts withheld are paid, and sent electronically, twice a week
- The date for payment depends upon the day withholding took place:
|If you withhold an amount on:
You must pay the withheld amount on:
|Monday or Tuesday
|the following Monday
|second Thursday after that day
|Thursday or Friday
|the following Thursday
|Saturday or Sunday
|second Monday after that day
When the due date is a public holiday, you may pay on the next working day.
From 1 July 2018, STP will be mandatory for all ‘substantial employers’ (those with 20 or more employees). Employers with 19 or fewer employees may be required to report through STP from July 2019, subject to the passage of legislation. All employers will need to do a headcount on 1 April 2018 to determine their obligation to report through STP.
Benefits for employers
- Providing payment summaries to employees and the ATO will be fulfilled through STP
- More efficient Activity Statements due to the removal of statistical labels for large withholders (gross wages and W1), and pre-fill of withholding related labels on monthly and/or quarterly activity statements
- No longer required to lodge tax file number (TFN) declarations for employees with the ATO
- STP will be reported as year to date (YTD) balances allowing employers to make adjustments (even for a prior payroll period) in future period reports
- The ATO will be able to recognise and deploy early assistance to employers struggling to meet their employer obligations
Benefits for employees
Through myGov employees will be able to:
- Complete superannuation choice and TFN declarations
- Access to a list of all the superannuation funds the employee has an account with
- Access YTD payroll details and a consolidated view of all employers reporting for that employee
- Consolidate superannuation balances
- Apply for a withholding variation
- Correct TFN declaration details if necessary
In addition, the ATO will be able to closely monitor compliance with the SG obligations of employers, therefore, minimising the risk of non-payment of super.
What you need to do
On 1 April 2018 do a head count of your employees – see How to count your employees.
If you have 20 or more employees you will need to ensure your payroll system is STP enabled
We would encourage all business owners who have payroll to look at STP-enabled software. Xero and MYOB Online will be enabled by 1 July. There are also a number of other payroll software options that will be enabled.
If you have any questions at all about the right option for you please give us a call and we will be happy to help.
If you haven’t done so already, set up your myGov account. This is where the ATO will send you notices and you will have access to a range of government services.