Single Touch Payroll Expansion
The Government has announced that over four years, from 1 July 2019, the Budget will provide $82.4 million to support the expansion of data collected through Single Touch Payroll (STP) by the ATO and enhance data matching capabilities for Commonwealth agencies.
STP requires employers to electronically report salary and wages information (including superannuation data and PAYG withholding amounts) to the ATO in real time at the time of each pay run. The purpose of STP is to improve data matching completed between employer, employee and superannuation funds. Originally introduced to apply to businesses with a headcount of 20 employees or more, from 1 July 2019 STP will be mandatory for all employers (deferrals may be available in limited situations).
Some of the measures announced in the Budget will fund the reporting of income details to the Department of Human Services for recipients of income support. This is expected to reduce the risk that an income support recipient also in receipt of employment income will end up with a requirement to repay overpaid income support payments.
The balance of the funding goes toward supporting the expansion of data collected through STP so as to reduce the requirement some employers may have to report information to multiple Government agencies.
Although this measure increases funding to reduce compliance costs and increase data matching for STP reporting, BDO questions whether the focus should be on assisting small business with implementing STP ahead of the looming deadline.
Additionally, it is our view that the data collected under the STP system will be used by the ATO to review compliance with employment tax obligations – in particular superannuation guarantee compliance.