Single Touch Payroll: What Employers Need to Know

What is Single Touch Payroll?

Single Touch Payroll is a reporting change for employers that starts from 1 July 2018 for employers with 20 or more employees and 1 July 2019 (subject to legislation being passed in parliament) for employers with 19 employees or less.

What will change?

Instead of reporting wages information to the ATO monthly or quarterly via an Instalment or Business Activity Statement, your payroll software will directly report this information to the ATO at the same time you pay your employees.  You can continue to pay your employees weekly, fortnightly or monthly.  You can also use different pay cycles for different employees.  It just means that the ATO will receive the wage and super information at the same time the payment to the employee is made.

If you use Single Touch Payroll you will not be required to provide your employees with a PAYG payment summary at the end of the tax year.  Similarly, you will not be required to provide the ATO with a PAYG withholding summary annual report.

What won’t change?

 Your payment dates for PAYG withholding will stay the same as they currently are.  The ATO will pre-fill sections W1 and W2 on your IAS’s or BAS’s where you would normally report wages and PAYG withholding.  Your superannuation payment dates will also stay the same.

What do you need to do?

 On 1 April 2018 you will need to count the number of employees on your payroll to find out if you are a substantial reporter (an employer with 20 or more employees).  All full-time, part-time and casual employees need to be counted as well as employees based overseas, employees on paid or unpaid leave and seasonal employees.  The headcount is not adjusted for Full Time Equivalent (FTE) employees.  Once you are a substantial employer you need to continue using Single Touch Payroll even if you head count drops below 20  from 2 April 2018 onwards.

If you are not a substantial employer on 1 April 2018 you can choose to use Single Touch Payroll voluntarily from 1 July 2018 or commence using it from 1 July 2019.

Payroll Solutions

You will need to update your payroll solution when it is ready.  SALO can assist you with checking when your current solution will be ready for the 1 July 2018 deadline.  If your current payroll solution is not going to meet the requirements of Single Touch Payroll, SALO can advise on which payroll solutions will meet your needs.

If you have any questions regarding Single Touch Payroll, please do not hesitate to contact Felicity, Rachel or Lauren.