Single Touch Payroll update: ATO’s limited trial & moving towards 1 July 2018 commencement
In the original plan for Single Touch Payroll (STP) transition, the Australian Taxation Office (ATO) talked about 1 July 2017 through to 30 June 2018 being a voluntary opt-in year. This provided the opportunity for solution providers and employers to enter the system early and trial STP before the mandated 1 July 2018 commencement date for ‘substantial employers’ (those with 20 or more employees).
Important changes to support and streamline transition to STP
As consultation with key industry stakeholders and the design of STP has evolved, changes were made to key technical and policy documentation, requiring further engagement and testing. A very controlled, limited release of STP began on 1 July 2017 and will operate with limited functionality until October 2017. This involved a small number of solution providers and some of their clients.
Additional functionality will be available after October 2017 and gradually other solution providers will be able to release their STP solutions. The delivery schedule for this wider release will align with final ATO updates and documentation which are expected to be published by mid-August. Solution providers would also consider the requirements of each client’s transition plan in making these arrangements.
Strong collaboration ensures a better outcome for our clients
ADP continues to work very closely with the ATO, including being a representative on all of the consultative work groups to ensure that:
- the STP regime the ATO delivers is as efficient and streamlined as possible for our employers (clients) ;
- STP does not deviate from the natural businesses process and what is already involved in payroll processing and meeting compliance requirements; and
- we deliver a STP compliant solution within a reasonable time frame and work with clients that cannot transition in time for 1 July 2018.
STP deferral and exemption process
In recognising however, that the deadline is looming, a draft paper on the process for applying for a deferral or exemption is almost finalised.
This means that solution providers and employers will be able to follow those guidelines if they have a genuine requirement to either defer their STP start date or be exempt from STP altogether. The document will outline the kind of substantiation that may be required by the ATO to process a request.
If you have any concerns about STP requirements and/or your ability to meet the mandatory start date, you should start talking to your bookkeeper or accountant about the deferral application process as soon as practicable.
Further information expected from the ATO
Over the next few months the ATO will be focused on educating key support groups for the substantial employers, including; associations, tax and BAS agents, payroll providers and solution providers. This is to ensure that those employers have support in understanding and transitioning into STP.
In addition, the ATO is proposing to write to all employers with 20 or more employees during September to inform them of their reporting obligations under Single Touch Payroll.
Written by: Angela Lehmann, Legislation Manager (Payroll & Tax), Australia and New Zealand
Additional resources to help you learn more:
- Click to read more about what STP is and how your business can benefit.
- Click to visit the ATO’s updated STP information page