As of 1 July 2018 if you are a ‘substantial employer’ – i.e. employ 20 or more employees, you will be required to report your payroll using Single Touch Payroll (STP).
This means, when you pay your staff, the employees’ salary and PAYG withholding amounts will be automatically reported to the Australian Taxation Office (ATO).
The aim of STP is to streamline and align employer reporting of Pay As You Go (PAYG) withholding and superannuation contributions to an employer’s payroll processes as well as giving the Commissioner real time data matching to ensure employers have complied with the relevant PAYG withholding and Superannuation Guarantee obligations.
While the Commissioner has advised that it will provide some latitude in regards to penalties, we believe that employers should review their payroll systems between now and 31 May 2018 to ensure they are compliant by 1 July 2018.
As the STP system will be up and running from 1 July 2017 we recommend that clients who fall into the category of ‘substantial employer’ should register to STP prior to 31 May 2018 to ensure they are not at risk of non-compliance.
It appears most major Accounting Software packages are working with the ATO to ensure their software is STP compliant; however we recommend you contact your AFS Tax Consultant to ensure this is set up correctly prior to 31 May 2018.
Should you have any questions regarding STP reporting or general payroll queries please do not hesitate to contact your AFS tax consultant on (03) 5443 0344.