What is Single Touch Payroll?
You might have heard that the Australian government has introduced new Single Touch Payroll legislation, but what does that mean? Essentially the government is seeking to streamline and modernise the reporting process for employee payroll by creating an electronic reporting connection directly with the payroll software systems of employers. This will allow the ATO to see payroll records including wages payments, PAYG, and Superannuation in real time from employers. Shifting to this new system will also reduce the paperwork and reporting burden on employers by allowing the ATO to collect information straight from your payroll software.
When do I need to be ready?
The new system will come into effect from 1st July 2018 for employers with 20 or more employees, and from 1st July 2019 for employers with less than 20 employees. You will need to conduct a headcount of your staff on the 1st of April 2018 to determine when you will need to commence Single Touch Payroll reporting. While all employers must be ready for single touch payroll by July 2019, those with less than 20 employees may still join earlier if they wish.
So what do you need to do to get ready?
If you are already using an electronic payroll software solution, then in most cases you won’t need to do much to get ready as your payroll software provider should be updating their systems to meet the ATO’s requirements for Single Touch Payroll. This should apply to most of the major software providers, however if you are unsure, it is recommended you contact your provider to ensure they will have their systems upgraded in time should you need to report from the 1st of July 2018.
If you are currently running a manual payroll system, such as a paper based system or your own excel spreadsheet for example, then you will need to switch to a payroll software provider. It will not be possible to comply with the ATO’s requirements without a payroll software provider who can facilitate Single Touch Payroll. The good news is that there are a number of providers in the market who can offer different solutions, so it is recommended you do your research on what they can offer and at what price to find the solution that best fits your business.
For all employers it also means that once Single Touch Payroll comes into effect, you will need to ensure you are complying with legislative requirements as the ATO will have much greater visibility of your payroll records. For example, this will mean they will have better visibility should you pay your Superannuation obligations late, so it is recommended that employers put systems in place to make sure Superannuation payments are made on time.
For further information about Single Touch Payroll please see the following information provided by the ATO – https://www.ato.gov.au/about-ato/about-us/in-detail/strategic-direction/streamlined-reporting-with-single-touch-payroll/?anchor=Employers1