Single Touch Payroll – Are you ready?

By Tina Zawila

Single Touch Payroll (STP) commences on 1 July 2018 and is mandatory for employers with 20 or more employees, yet most are not even aware of what STP is all about.  And before you think that 1 July is ages away, you should be aware that you need to count the employees who are on your payroll on 1^st April, to determine if STP applies to you from 1 July.  

When doing your count, you include each individual employee, not just your FTE’s (full-time equivalents).   If a casual employee worked for you anytime during the month of March 2018, they should be included.  Of course you should also include any employees who are on leave, are seasonal, or even if they work for you overseas.   So take care, you may not think you ‘usually’ employ 20 people, but it is possible that you could hit that number based on the requirements of the head count.

There are a few limited exemptions to the head count including independent contractors, staff provided by third-party labour hire organisations and company office holders and directors.  However, if you meet the headcount and are required to report through STP, you will then include these employees in your STP reporting as normal (they just don’t count towards the initial head count).

You should also be aware that once you become what is called a “substantial employer” (with 20 or more employees) then you will need to continue reporting using STP even if your employee numbers drop to 19 or less (unless you apply for, and are granted an exemption).

So what’s STP all about?

Quite simply it means that you will report payments such as salaries and wages, pay as you go (PAYG) withholding and superannuation information from your payroll solution to the ATO each time you pay your employees.  

Therefore you will need to ensure your payroll software is STP ready and compliant before 1 July 2018.  Many of Australia’s leading software providers are working on this functionality to have it ready by the start date.

If you do not qualify as a substantial employer this year – be aware that from 1 July 2019 STP will apply to all employers (subject to legislation passing in parliament). 

If you have any questions regarding STP, contact the professional team as Sothertons Gladstone on 4972 1300.