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Background

Single Touch Payroll will streamline payroll reporting for employers.

Employers with 20 or more employees will need to use Single Touch Payroll-enabled software to report to the ATO from 1 July 2018. It will align reporting obligations to existing payroll process – no matter how employee pay arrangements are structured.

In August 2017, The Minister for Revenue and Financial Services announced changes to super fund reporting. Funds will report to the ATO when an employer pays their employees’ super entitlements. The initial design of Single Touch Payroll put the onus on employers to report to the ATO when they paid their employees’ superannuation.

The Australian Government also announced it would expand Single Touch Payroll to employers with 19 or less employers from 1 July 2019, this is subject to passage of legislation.

About Single Touch Payroll

Employers will report payments such as salaries and wages, pay as you go

(PAYG) withholding and super information to the ATO from their payroll solution at the same time they pay their employees.

Employers may need to update their payroll solution (accounting software) to report through Single Touch Payroll. Some employers may need to choose a new payroll solution that is Single Touch Payroll-enabled.

There are also changes to the way super funds report to the ATO. Funds will be required to report the payment of super contributions more frequently to us (known as event-based reporting). This will create visibility of non-payment or late payment of super guarantee and enable us to take prompt action.

Software developers are building updates to their products to offer Single Touch Payroll reporting from 1 July 2018. Some software developers may need a deferred start date and have already applied for a deferral.

What you need to know Single Touch Payroll Who has to report?

Employers with 20 or more employees will be required to report through Single Touch Payroll.

The Australian Government has announced it will extend Single Touch Payroll to employers with 19 or less employees from 1 July 2019. This will be subject to legislation being passed in Parliament.

When do I start reporting?

Employers will need to do a headcount of the number of employees they have on 1 April 2018. If they have 20 or more employees on that date, they will need to start reporting to the ATO through a Single Touch Payroll-enabled solution from 1 July 2018.

Which employees do I include?

All employees within the ordinary (common law) meaning of ’employee’.

Excludes independent contractors, staff provided by a third party labour hire organisation, company directors, office holders, religious practitioners or any employee who ceased work prior to 1 April.

What and how often do I have to report?

Payments such as salaries and wages, pay as you go (PAYG) withholding and super information at the same time you pay your employees.

What wont I have to do if I report through Single Touch Payroll?

Employers may not need to provide the ATO with an end of year payment summary.

Single Touch Payroll Features

Payment summaries

Employers who report an employee’s payment and withholding details through Single Touch Payroll may not have to provide that employee with a payment summary at the end of the financial year. The ATO will provide this payment and withholding information to employees through mayo.

Pre-filled activity statements

In future, some of the information reported through Single Touch Payroll will be used to pre-fill parts of the employer’s activity statement (labels

W1 and W2). Large withholders will not have to report PAYG withholding through their activity statement.

Online forms

Over time, commencement forms for new employees can be completed online and some information will be pre-filled and validated. This includes Tax file number declaration, Superannuation standard choice form and Withholding declaration forms.

Payment summaries

Employers who report an employee’s payment and withholding details through Single Touch Payroll may not have to provide that employee with a payment summary at the end of the financial year. The ATO will provide this payment and withholding information to employees through myGov.

MyGov

Employees will be able to see their year-to-date tax and super information online through myGov as their employer transitions to Single Touch Payroll reporting.

Small business

The Government announced Single Touch Payroll reporting will be extended to include employers with 19 or less employers (including small businesses).

Subject to passage of legislation.

Employers with 19 employees or less do not have to wait until then to report through Single Touch Payroll.  They can choose to update their payroll solution (if they have one) when it’s ready, and start reporting.

We understand there is a small but significant group of small employers (less than 10%, or around 70,000) who don’t report regularly to the ATO using digital means, or don’t currently use payroll software.  This is the group that is expected to require the most help to transition to Single Touch Payroll.

The ATO is not intending to develop a Single Touch Payroll reporting solution at this stage. We are currently working with the software industry to support and encourage them to develop low cost/no cost options for small employers. They will need to include options for reporting to the ATO through solutions other than payroll systems, as some smaller employers do not need payroll software.  We expect new solutions to be available by 1 July 2019 – the expected start date for employers with 19 employees or less employees. We will review the options available on the market by 1 July 2018 and determine if a different strategy is needed.

We’ll provide tailored help and support to help small businesses make this change. This could include additional time to get ready, exemptions where appropriate, webinars and dedicated call centre staff trained in Single Touch Payroll.

Small businesses can ask a third party to report through Single Touch Payroll on their behalf, e.g. a registered agent such as a bookkeeper or payroll service provider.

Changes to super reporting

There are also changes to super reporting.

The ATO has worked with the super industry to redesign large super fund reporting. This initiative is known as the APRA fund superannuation reporting transformation. The initiative includes the requirement for super funds to report to the ATO more regularly (known as event-based reporting).

This will create visibility of non-payment or late payment of super entitlements and enable the ATO to take prompt action.

Under the new design, super funds will report contribution payment transactions through the Member Account Transaction Service (MATS).

Employers will not be required to report the payment of super contributions to the ATO through Single Touch Payroll.

Single Touch Payroll updates

• New employer content has been published on ato.gov.au
• Employers will receive an email or letter starting on the 6th of March 2018 and finished by mid-April 2018. Employers with 15-30 employees will receive the communication first to ensure smaller employers get the headcount message in time to act.
• Help and support material will be distributed in March 2018. The aim is to support and educate intermediaries to assist their clients (employers) transition to STP from 1 July 2018.
• Individual tax time prefill will now include Single Touch Payroll information; this will replace individual payment summaries (in most cases) for employees of mandated employers.
• Following user testing and external consultation changes have are being made to improve the user experience when viewing employer and employee data in the business portal, tax practitioner portal and for individuals through MyGov. Changes include improved terminology and data display screens. This is currently under development and will be released once finalised. We will provide an update when it becomes available.
• Changes have been made to allow an agent to register at the Single Touch Payroll role level (similar to current nominated roles). If you are the agent in the Single Touch Payroll role then the ATO recognises that you have a connection with the Single Touch Payroll pay event and the employer.