Important changes that will affect the way you manage your business’ payroll come into effect on 1 July, 2018.
From that date, if you employ 20 or more employees, you will need to report to the Australian Taxation Office (ATO) every time you pay your employees.
Known as Single Touch Payroll (STP), you will need to report your employees’ salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and superannuation.
You will no longer need to provide employees with payment summaries as their payment information will be available to review online via their mygov account.
If you employ 19 or less employees, this change will not affect your business process until 1 July 2019, subject to legislation passing in parliament, however you are able to implement the system earlier.
What Do You Need to Do?
You may be able to report to the ATO from your existing payroll solution or you may need to invest in a new Single Touch Payroll software platform.
If you need a new software platform, you must act now because you’ll need time to research the best solution to meet your business needs and implement it.
Ayers is well placed to advise you on whether you need to adapt your existing payroll solution or invest.
Our team has over 20 years’ experience managing payroll for Australian business, the technical know-how to build bespoke payroll solutions, and an indepth understanding of the legislative change affecting your business.
Talk to an Ayers expert today.
Summary of Changes
The Australian Taxation Office has provided the following summary of legislative changes:
Current Law – Until 30 June 2018
- Employers are required to withhold amounts from an employee’s salary or wages at the time it is paid. They notify the Commissioner of Taxation of the amount withheld at a later date, remit these amounts to the Commissioner, provide each employee with an annual payment summary and provide an annual report to the ATO.
- Employers are required to report superannuation contribution information to funds on the same day they make a contribution to the fund (through SuperStream). Employers are not required to report this information to the ATO.
- Employers must lodge superannuation guarantee (SG) statements to the Commissioner if they have a SG shortfall for a quarter, or if required to do so by the Commissioner under the Superannuation Guarantee (Administration) Act 1992.
New Law – From 1 July 2018
- Employers with 20 or more employees are required to report to the Commissioner through Single Touch Payroll-enabled software.
- The following information must be reported on or before the day you withhold from a payment (the pay day):
- payment information, including salary or wages, allowances, deductions, etc.
- withholding amounts
- superannuation liability information or ordinary times earnings (OTE).
- Employers who fully report all the information required through Single Touch Payroll will not have to comply with a number of other reporting obligations under the existing law. This includes providing certain payment summaries and the corresponding payment summary annual report (PSAR). They will need to provide a finalisation declaration with the ATO.