Australia a step closer to Single Touch Payroll and greater efficiency
After many months of attending consultation meetings and close collaboration with the Australian Taxation Office (ATO) on Single Touch Payroll (STP) – I’m thrilled to share that it was introduced into Parliament this week, via the Budget Savings (Omnibus) Bill 2016.
Here’s a quick recap about the business benefits, key ATO deadlines and where you can find out more – as well as, how you can get your business involved in ADP’s STP pilot for small business.
How does STP benefit my business?
STP provides employers and employees with more efficient and transparent payroll reporting.
Auto reports and processes that suit you
For example, every time an employer pays their staff, the salary/wages and PAYG withholding amounts will be automatically reported to the ATO. This means employers with STP enabled software won’t have to prepare employee payment summaries including Employment Termination Payments (ETP) and Foreign Employment Income (FEI) payment summaries. This adds up to significant time savings, especially if you run a weekly or fortnightly payroll.
Employers will also have the option to pay their PAYG withholding to the ATO at the same time they pay their staff – no need to wait until the activity statement is due!
The ATO shall frown less upon errors
STP allows the ATO to be a little more relaxed when it comes to errors and adjustments to payroll as, in most cases, they will accept that any such errors or adjustments will be carried forward for STP reporting in the next payroll event.
The legislation includes a “grace” period that states that the ATO will not penalise employers in their first 12 months of STP.
Watch your super grow in real time
If you’re a numbers person like me, you’ll definitely appreciate this feature of STP. All superannuation liabilities will be automatically reported to the ATO – allowing employees to track their super balances in real time, through their individual myGov account.
Farewell to inaccurate new start forms
If capturing accurate details from your new starts get you frustrated – STP is a gift from the paperwork Gods! New employees simply log into their myGov account to access pre-filled tax file number declaration and super choice forms.
What are the ATO deadlines?
Here are the key dates you need to take note of:
January – April 2017
Small business (19 employees or less) pilot to determine the value of STP and a phased approach to implementation for this group.
1 July 2017
Voluntary or early adoption opens to businesses of any size with a STP enabled provider.
1 July 2018
Mandatory STP adoption deadline for employers with 20 employees or more (based on number of employees as at 1 April 2018).
Where can I find out more or get involved?
Assistant Commissioner, Single Touch Payroll, Australian Taxation Office, John Shepherd and I are hosting a joint session at the 2016 APA Conference to provide the latest updates on STP – how it will impact your role, business processes and the transition into better interactions with the ATO. And in the meantime, you can watch a short webinar we had on this topic a few weeks ago.
ADP is also scheduled to run a small business pilot to explore the benefits of Single Touch Payroll for small business – please email us if you’d like to be involved.
Written by: Angela Lehmann