The much-publicised Single Touch Payroll (STP) legislation was passed by the Senate on 5 December 2018.
The STP legislation affects all employers by adding a new level of reporting obligations.
Whilst some employers would already be subject to the STP provisions (for example, they had more than 20 employees on 1 April 2018) all employers will be affected by having an STP adoption date of 1 July 2019.
What does STP achieve? Simply put it is streamlining for employer’s payroll reporting.
What does STP report and when? Your payroll software (if properly established and STP compliant), will automatically report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO when you pay your employees.
Your payroll cycle will not change. You can still pay your employees weekly, fortnightly or monthly.
Your payment due date for PAYG withholding and super contributions will not change. However, you can choose to pay earlier.
You may not need to provide your employees with a payment summary at the end of financial year for certain payments you report through Single Touch Payroll. The ATO will make that information available to employees through myGov.
As a result of industry and employer feedback about compliance costs, the Australian Taxation Office (ATO) have requested the market to provide low cost options (less than $10 per month) for Micro employers (1 to 4 employees). At the date of this article there are approximately 31 low cost solutions that will be available early in 2019.
What happens if you fail to become STP compliant by the due date? The ATO have stated that “During the first 12 months you report through Single Touch Payroll you will be exempt from an administrative penalty for failing to report on time. This is unless the ATO have first given you written notice advising that a failure to report on time in the future may attract a penalty.” It is important to note that penalties may be incurred if late reporting is too frequent.
What do you need to do? If you are an employer we recommend contacting your DLA relationship team on (07) 3863 9444 to discuss how the STP legislation will affect you and your business and what solutions might be suitable.
This information does not constitute financial or legal advice and is for general information purposes only. Please contact DLA Partners for specific advice relating to your particular circumstances.