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Single Touch Payroll is on the horizon, what does this mean for business?
2019 Update: This blog has been updated to include relevant Single Touch Payroll information since the initial blog publish date.
On the 1st April 2018, all businesses were required to conduct a head count of all staff (full-time, part-time, and casuals included) to determine when they will be required to be single touch payroll ready.
If they employed 20 or more staff, they need to be single touch payroll ready for 1 July 2018. If they are not ready by this date, an application will need to be completed and sent to the ATO to have your own deferred starting date.
Smaller businesses (with less than 20 full-time, part-time, or casual staff) will have to be single touch payroll compliant by 1 July 2019. However, this does not mean that you have to wait to become compliant, as many have already started the process to become Single Touch Payroll ready.
All businesses with employees will be required to use small business reporting enabled payroll software by 1 July 2019. This change will have no impact on current payroll or superannuation payment cycles. After processing every pay run and making payment to employees, this information will be automatically reported directly to the ATO, via your Payroll Software.
This information will then be updated to every employee’s myGov accounts in real time which will, in turn, update the Super Funds of the liabilities owed to them.
The Changes include:
- Payroll Software
- Reporting Timeframes
- Payment Summaries
Why is this happening?
Single touch payroll has been created to solve late or non-paid superannuation. The ATO is trialling a new system of streamlined reporting to ensure businesses are meeting their obligations to their employees. This will also result in less tax debt including overpayments made to individuals.
Is the software I am using ready for Single Touch Payroll?
Software developers are currently waiting for instruction from the ATO to make the final adjustments to their programs to ensure their platform integrates seamlessly. Real-time reporting means that when you process wages to employees, the super payable will be reported directly to the Super Funds and the PAYG withheld reported to the ATO.
Xero, MYOB and Quickbooks KeyPay provided STP ready business solutions in anticipation of the 1 July 2018 deadline.
Check out another recent blog in this category.
Is your business STP ready?