Implementing Single Touch Payroll (STP)
From 1 July 2018, all employers with more than 20 staff will be required to implement a payroll system that reports directly to the ATO with every pay cycle.
This payroll system must be SBR-enabled, so that you can report to the ATO each pay cycle the following items:
- each employee’s name and tax file number (TFN)
- gross amount paid
- tax withheld on the gross
- ordinary time earnings for the period, and
- any superannuation guarantee obligations.
The ATO will then report to you each month or quarter the correct amount of PAYG tax withheld to pay in your activity statement.
Also, each quarter there will be information available regarding your superannuation obligations to either pay the ATO clearing house or your independent provider.
As part of the new regime, the reports and liabilities owing will be available to you in real time. This means that, if you wish, you will be allowed to make payments towards PAYG tax withheld and superannuation contributions in your pay cycle before the legislated due date.
If your system is already automated with reports that can provide the information listed above for every pay cycle, the system may just need an update to become SBR-enabled.
However, if your system is still manual it is now time to discuss and review your internal processes. The STP regime is mandatory for employers of more than 20 staff from 1 July 2018, and will most probably be mandatory for all employers by 1 July 2019.
Our advice is to become STP ready to avoid any fines or penalties in the future from the ATO. We are here to help you through the process if you need it. Please do not hesitate to contact our office for support.
Martin van der Saag
Director
T: 02 9984 7774
E: martinv@northadvisory.com.au
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
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