As a business owner, you may have heard about Single Touch Payroll but now’s the time to really sit up and take notice.
From 1 July 2018, all employers with 20 or more employees (considered a ‘substantial employer’) will be required to use the Single Touch Payroll reporting system.
If you have 19 or less employees, the new reporting system will be optional until 1 July 2019.
The Single Touch Payroll system was created in order to simplify administration processes for employers, as you will no longer be required to report employee-related PAYG withholding in activity statements throughout the year or provide year-end payment summaries.
By updating your payroll system to comply with Single Touch Payroll, you will be providing the Australian Tax Office (ATO) with information relating to superannuation, salaries and wages, and PAYG withholding directly (in real time) from your payroll solution at the same time you pay your employees.
The idea is that reporting will align with regular business processes, such as payroll cycles, simplifying ATO obligations for employers.
So, what do I need to do?
Your software provider or payroll service provider will tell you when their payroll solution has been updated to include Single Touch Payroll, and you have the option to start reporting through the new system early if your payroll solution is ready.
The ATO is working closely with payroll software providers to help them get ready to offer Single Touch Payroll reporting for their clients, i.e. you.
To get ready, you’ll need to count your employees on 1 April 2018 to check if you have 20 or more employees (making you a ‘substantial employer’).
You’ll then need to update your payroll solution when advised by your payroll software provider, and then start reporting through Single Touch Payroll from 1 July 2018.
If you become a substantial employer on 1 April 2018 and you don’t have a payroll solution in place, you will need to choose a suitable Single Touch Payroll-enable solution to suit your business.
It’s a good idea to speak with your accountant about what options are available and will work best for your business.
You can also check which payroll solutions are already Single Touch Payroll-enabled on the Australian Business Software Industry Association website and choose one of them.
Please note, once you are up and running on the Single Touch Payroll system, your usual payroll cycle doesn’t need to change.
You can continue to pay your employees weekly, fortnightly or monthly. Or you may have different pay cycles for different employees.
The only change will be that, when you complete your payroll, the tax and super information for your employees will be sent directly to the ATO, providing a more streamlined reporting process.
If you have any questions about Single Touch Payroll, or if you are unsure of your obligations and the processes to setting this up, please contact your MWM Advisory accountant.
Simply call 5596 9070 or email firstname.lastname@example.org.