Single Touch Payroll - Introduction
Single Touch Payroll (STP) is the next step in streamlining the process of payroll reporting to the ATO.
It applies to employers with 20 or more employees as at April 1, 2018. From July 1, employers will be required to send payroll information directly to the ATO at the conclusion of each and every payroll including data on salaries and wages, pay as you go (PAYG) withholding tax and super information.
Businesses will no longer be required to submit payment summaries at the end of the financial year.
By this time all employers will have been contacted directly by the ATO in respect of their STP obligations.
These attached documents reflect the work we at Powerforce are undertaking to ensure that our payroll module conforms with ATO requirements.
How does it work (employer)
You will be required to send your tax and super information on or before each pay day. The ATO calls this a ‘pay event’. You are not required to change your current pay cycle. You can continue to pay your employees weekly, fortnightly or monthly or you can have different pay cycles for different employees.
You will be able to make changes to an employee’s year-to-date amounts in your next report, or through an ‘update event’.
The update event allows an employer to provide corrections and revisions of YTD values for their employees. This event can include employees who are no longer being paid but whose YTD values need updating.
It also allows an employer to declare that their employee’s EOFY data is complete.
How does it work (employee)
Employees will be able to see their year-to-date information online through the myGov website.
- Once they start reporting to the ATO more frequently, employees will be able to see their year-to-date tax and super information online.
- This will be available by logging into myGov and accessing the ATO online services.
Employees can check if their super has been paid.
- Super funds will be reporting to the ATO more frequently.
- When an employer pays an employee’s super contribution the super fund will report that information to the ATO.
- This will assure that the employer is paying employee super entitlements on time and in full.
Your employer may change the way they present a payment summary.
- Some employers will no longer need to give their employees payment summaries for the information they report through Single Touch Payroll.
- The ATO will make this information available to those employees through myGov.
- The Employer should let employees know if there is any change to the way they issue payment summaries.
- The Employer may choose to continue with their previous method of reporting.
More employee information will be pre-filled into myTax.
- This is important for any employee who prepares and lodges their own tax return through the ATO’s online service myTax.
- The employee’s registered agent will be authorised to access this information on the employee behalf.
Further information links
- Single Touch Payroll ATO information link
- STP DSP information pack (users may possibly not have access to this ATO document)
- STP Business Implementation Guide (16 page information brief).
- STPBIG - Single Touch Payroll, Payroll reporting: Business implementation guide
- STP technical and DSP Operational Framework walkthrough - 24 May 2018
- Practitioner lodgment service working group meeting - 22 May 2018
2018 PAYG Tables
This is not law yet, though ATO has published this today (23/05/18) 2018 Pay as you go (PAYG) withholding tax tables
At present, these formulas have no legal basis. They have been provided to assist digital service providers who may want to work with these formulas now, on the understanding there is no certainty they will become law.
We have also published the formulas for higher education loan repayments. With the exception of the scales which combine withholding for income tax with the loan repayments, these are final and correct for the 2018-19 year.