Single Touch Payroll Reporting

10 October 2017

The Australian Tax Office’s (ATO) introduction of the Single Touch Payroll Reporting (STPR) will streamline the way employers report some tax and superannuation information to the ATO. While STPR certainly has some administrative benefits, there are a few things that need to be in place before the compulsory switch takes place from:

  • 1 July 2018 for businesses that employ 20 or more people
  • 1 October 2019 for businesses that employ less than 20 people

What are the changes?

The main changes you will notice when adopting the STPR are:

  • Ordinary Time Earnings, salary and wages, allowances, deductions, superannuation information and Pay-As-You-Go (‘PAYG’) withholding information will be reported and available to the Commissioner in ‘real time’ when payroll is periodically processed by the employer
  • Employers will need to acquire SBR-enabled software to comply with their PAYG withholding obligations
  • New employees will have the option of completing TFN declarations and Super Choice forms online
  • The STPR reports for PAYG withholding will become the approved form for reporting PAYG withholding (currently this information is in the activity statement)
  • Employers that have reported their PAYG withholding obligations via STPR will have their PAYG withholding prefilled by the ATO on their BAS
  • Large withholders will no longer report PAYG withholding on their activity statement
  • The ATO envisages that employers will be provided with the option to pay their PAYG withholding at the same time they lodge their STP reports to further align the reporting and payment of PAYG withholding through the payroll system
  • Employers will no longer be required to submit an annual PAYG report to the ATO

Employers may no longer need to provide payment summaries to employees, as the employees will have access to their payroll information via their myGov account.

What should employers do?

Understanding how this change applies to your organisation and beginning the planning process will provide a smooth roll-over to this new reporting requirement.

Before the compulsory 1 July 2018 start date for business that employ more than 20 people, employers will need to ensure their payroll system is STPR enabled to be compliant with the new law. This may involve additional cost for employers, particularly those that do not currently use software based payroll systems or out-of-date payroll software systems. A range of payroll software providers are working with the ATO on product updates from 1 July 2017 to ensure STPR enablement.

We strongly recommend reviewing your company’s SGC and PAYG payroll processes to ensure the treatment of various types of payments and remuneration is correct, before the mandatory change to STPR for substantial employers.

The three steps to begin the transition

  • Have detailed conversations with your accounting software provider/s to confirm whether the current payroll processing arrangements will support the changes
  • Conduct a risk review of your current payroll procedures, including PAYG, superannuation, allowances, payroll deductions and the timeliness of payments
  • Review and monitor your HR processes to ensure employees are being treated fairly and paid correctly.