Single Touch Payroll Reporting (STPR) for employers
Single Touch Payroll Reporting was legislated in September 2016 and is now available to limited businesses. Many employers will have to use this new system by 1 July 2018, so do you know what STPR is and how it affects you?
What is the STPR?
In very simple terms, the STPR is a means of reporting to the ATO as you finish a pay run instead of creating separate annual summaries. The government introduced this concept to reduce red tape and administrative time for businesses, increase the ATO’s ability to monitor the SG and reduce employees claiming multiple tax-free thresholds.
STPR will be implemented via payroll software or through a third party provider (such as a payroll service or your accountant).
What information do I have to give?
- Salaries & wages
- Deductions (eg workplace giving)
- PAYG withholding
- Super contributions information
Is it compulsory?
Currently, limited function software is available, with most providers having STPR ready software in place in October 2017.
It will be compulsory for significant employers from 1 July 2018 and may be compulsory (subject to legislation) for smaller employers from 1 July 2019. An administrative penalty will apply to employers reporting late or false/misleading data.
Am I a significant employer?
On 1 April 2018, you must do a headcount of your employees. If you have 20 or more employees at that date, you are considered to be a significant employer, even if you reduce to 19 employees soon after that date. Once you are a significant employer, you keep that classification unless the Commissioner approves a change for you.
Note it is a count of the number of employees, not how many full time equivalent (FTE) employees you have. It includes part time, seasonal and overseas workers, plus all casual employees who worked during March 2018.
It does not include independent contractors, staff from a labour hire agency, company directors and other office bearers (unless they are also employees) or religious practitioners.
How will this affect my business?
- You will not have to produce specific reports to send to the ATO – the software will do it for you
- You will not have to prepare PAYG summaries for your employees (they will be able to see their details throughout the year via their personal MyGov account)
- Your employees may be able to give their TFN and Choice details online, but you will still have to provide hard copies
- You will be providing more information to the ATO about ordinary time earnings and super contributions paid
- PAYG payments will be auto-generated in your Business Activity Statements (BAS)
- Payroll cycles do not have to change and current payment dates (such as quarterly super contribution deadlines) will not change
- Initially, data will be provided real time but reporting of errors will not yet be in real time. Thus fines may apply if you have systematic errors in your payroll
How can I prepare?
- Review your payroll system now and remove any systemic errors or steps requiring a manual fix
- Make sure you are compliant with your SG obligations – are you using the right contribution rate? Are you including all eligible employees?
- If you already use a payroll software, check with your provider when it will be STPR compliant
- If you don’t use payroll software, look into the options and decide if it using such software is a good fit for your business.
- Do a headcount of your employees on 1 April 2018
- Start STPR at any time you are ready – make sure it is by the deadline for your size of business.
- Update any information for new employees as required
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