Single Touch Payroll (STP) is set to change the way just over 100,000 employers report salary and wage payments to the ATO for about 13 million employees.
A further 700,000 employers may choose to voluntarily embrace this streamlined reporting standard.
Safe to say, this could be pretty big.
So what do you need to know before 1 July next year?
What is STP?
It’s a government initiative to simplify business-reporting obligations.
Single Touch Payroll is a reporting change for employers with 20 or more employees.
Employers will need to report payments such as salaries and wages, PAYG withholding and super information electronically through to the ATO directly from their payroll solutions at the same time they pay their employees.
What does that mean, I hear you ask? It means at the end of the financial year these employers won’t need to complete payment summaries for their employees as the payroll information would have been reported to the ATO in real time throughout the year.
It means a raft of payments which needed to be done manually can now be done automatically.
STP will become mandatory for all employers with 20 or more employees.
However, employers with fewer than 20 employees will also have the option to adopt STP if they so choose.
The official start date for STP is 1 July 2018.
But before that, on 1 April 2018, employers will need to do a head count of their employees.
If they have more than 20 employees on that date, they’ll need to make sure their payroll software is STP-enabled from 1 July.
The ATO is working with a small number of employers right now on a “limited release” of STP – and you can expect to hear more from software providers such as MYOB during the preparation stage.
READ: Are you an accountant? Find out how to work with STP in your practice