single touch payroll for small employers

Single Touch Payroll

for

Small Employers

UNCLASSIFIED: Australian Taxation Office

Why Single Touch Payroll?

Streamlined reporting

Protecting Super Guarantee entitlements

Use of natural business

processes/systems

Real time information

Levels the playing field

Helps prevent end of year

tax surprises


Consultation with Micro Focus Group

1 July Start date for

employers with

20 or more

employees

1 July Start date for

employers with

19 or fewer

employees

Small Business

Pilot

conducted

Small Business

Pilot Final Report

published

September Legislation passed

for employers with

20 or more

employees

2019

Background

2019 2018 2016 2017 2016 Consultation with

Industry

February Legislation

passed to extend

to all employers

Commissioners

statement

published

What we heard: • Cost

• Non-digital employers

• Some are heavily reliant on their registered agents

• Closely held payees


65K+ Employers now reporting

43K+ substantial employers

20K+ small employers

4.6M+ employees can see their STP

information in

Progress update as at 5 March

services now deployed

Employee Commencement


Single Touch Payroll

How does it work?


Payslip

Bank file/EFT/Internet banking

Super payment made to fund

SuperStream report

How Single Touch Payroll works

Software

Existing payroll process

Tax and super information is sent to the ATO through

Standard Business Reporting every pay day

Pay event Submission

• Salary or wage information • Tax withheld • Superannuation liability

Super contribution amounts reported to the ATO by the super

fund

Member Account Transaction Service

• Employer information • Employee information • Superannuation contribution

New under STP


Employers can view their STP lodgments in the portal

ABN 12345678999 TFN 12345678999

11223344

ABC INC

IP33221nb-V123-458v-PRG611122144

Current Client

Great Company


Employees will be able to see their information in ATO online services

Employee views - ATO Online

Great Company

Great Company

Employees can click

here to expand for

more detail


Great Company

Great Company

Employee views - ATO Online

Great Company PTY LTD

12 345 678 999/001

IP33221nb-V123-458v-PRG6B1144


Employee views - ATO Online Employees will be able to see their super information in ATO online services

Last

Last

Last

Last


EOFY Finalisation Declaration How will EOFY be different?

Employers will be exempt from providing payment summaries where information has been reported and finalised though Single Touch Payroll - by the 14 July due date or deferred due date.

Employer submits finalisation declaration to

the ATO

Employee can view their information in ATO Online

services via myGov

Amendments after finalisation

Employers will need to provide a payment summary for any payments not reported through Single Touch Payroll i.e. employee share scheme

ATO prefills information in Income Tax Returns

If an employer identifies the need to amend details after making a finalisation they can submit an update event within 14 days of detection.

Tax Ready

PLS


Correcting a payroll event report

Must report within 14 days of detection

Rollover Correction - report at next pay cycle

Update event

Full file replacement - for significant errors

*Out of cycle payments

Employers can either submit a pay event on that day or in their next pay cycle.


Transitioning

Small employers


.

33% already use

payroll software 17%

use no software

50% use some software

67% already use

payroll software

9% use no

software


What we know about software usage

Micro employers (1-4 employees)

Employers with 5-19 employees

45% already use

payroll software 15% use no

software


All small employers

There are 749,000 small employers. Here is what we know about their software usage:


We co-designed

.

Low/no cost reporting solutions

($10 or less per month)

Simplified reporting requirements

(limited set of fields)

Transitional relief by way of deferrals

and/or exemptions

Transitional relief by way of quarterly

reporting until 30 June 2021

We consulted with a tax practitioner and industry representative group to explore practical solutions for helping small and micro employers transition to STP - especially those with little or no digital capability. The group targeted four needs associated with micro employers (1-4 employees) with low digital capability:


Simple, low/no cost reporting solutions

The ATO called for expressions of interest from Digital Service Providers to develop appropriate low or no cost payroll or reporting solutions.

You can take a look at a product register by visiting ato.gov.au/stpsolutions

The Criteria:

A low or no-cost solution ($10 or less

per month for micro employers 1-4 employees)

A simple user experience

‘Minutes’ to complete per pay

event

An easily repeatable experience

Pain free set up Easy to access help (especially at setup)

Secure online environment

Solution is provided as an ‘end-to-end’

service to the employer


Quarterly reporting – for micro employers To support employers with 1-4 employees to move towards pay day reporting we are offering quarterly reporting.

Quarterly reporting arrangement up until 30 June 2021

Agents will be able to apply for this concession electronically

Digitally assisted lodgment through registered agent

What we will consider when assessing the application:

• all amounts owing to the ATO are either not yet due or subject to a payment plan • all lodgment obligations are either not yet due or subject to a deferral

• meets any one of the following criteria: o non computerised business

o irregular employment patterns o closely held


Extended finalisation due date (the due date of the income tax return)

for the closely held payees.

In line with existing concessions for Pay As You Go (PAYG) Payment Summaries.

Reporting closely held payees We will support small closely held employers to transition to STP by:

Exemption for closely held payees for 2019-20 financial year.

Closely held payee reporting will need to

commence 1 July 2020.

Quarterly pay event period for closely held payees.

Arms-length employees will need to be

reported each pay day.

We hosted a topic based webinar on reporting closely held payees on 18 March 2019.

Watch the recording at ato.gov.au/stp > news,

events and resources.


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Requesting

More time and exemptions


Requesting more time

If an employer can commence reporting before 30 September 2019, there is no need to apply for more time

An online deferrals an exemption form will be available to apply for

more time

The solution will be available from 1 April

A majority of requests will be accepted in real time without the

need for further assessment

Things to consider: Are all lodgments and payments

up to date? (or subject to a deferral/payment plan)


Requesting an exemption We will assess exemption requests on a case by case basis.

Applications can be submitted using the online form or by contacting the ATO

Hardship Intermittent or no internet

connection

Other extenuating

circumstances


Online deferrals and exemptions


Focus

Helping employers get it right


Allowing time for self correction

Purposeful Engagement

Two way interaction

Data Integrity

Our engagement approach


What your experience might look like Our treatments will range from reminders and nudges to more directive interventions where needed.


We will encourage and support you in maintaining a good client experience with the lightest touch possible.

Green Lane

Help & Assist

We will provide tailored support and assistance to help you meet your obligations with the larger aim of helping you move towards the ATO’s target engagement

behaviours.

High Trust

We will tailor your experience We will tailor our engagement to your behaviours over time.

We will apply the law firmly and fairly to your non-compliance behaviours, while responding to indicators of positive engagement by providing help and assistance

where it’s warranted.

Red Lane

Orange Lane

Poor Compliers


Checklist

Getting ready for Single Touch Payroll


Determine how you will report through STP 1

The get ready checklist

If you use payroll software, talk to your provider

Talk to your staff about STP

Apply for more time if you need it

See our Single Touch Payroll employer reporting guidelines

Update or install your software when its ready

2

3

4

5

6


ato.gov.au

Events

Topic based webinars

Where to find out more

Articles

Speak with

your provider

BMS

BMS

Speak with your registered agent


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single touch payroll for small employers

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