Single touch payroll will change the way businesses report salary/wages, PAYG and superannuation information to the tax office. So what is single touch payroll and how big is the change? We explain the main points.
Summary of single touch payroll
Single touch payroll is a new regulation that changes when and how small businesses report payroll activity to the Australian Tax Office (ATO).
Changes to when you report payroll
Small businesses used to finalise their payroll records at the end of the financial year and produce:
With STP, the payment summary annual report and the payment summary will go away.
No more payment summary annual reports
Because you’ll be updating the ATO on a pay-by-pay basis, you won’t need to prepare a payment summary annual report anymore. You’ll just let the ATO know when you’ve made your last pay run of the financial year for your employees.
No more employment payment summaries, either
Payment summaries won’t need to be sent to employees anymore, so employers won’t be required to produce them. The ATO will use single touch payroll reports as the sole record of salary/wages paid, taxes collected, and superannuation contributed.
Your employees will be able to see the information that would normally be on their payment summary by logging on to myGov.
You'll need to report payroll online
There’ll be no more paper forms for reporting your payroll activity to the ATO. You’ll need to submit the information online, using a specific format known as SBR (Standard Business Reporting). Depending on how you do payroll now, you may need to change software or find a service provider who can produce compliant reports for you.
When is the single touch payroll deadline?
Small businesses with fewer than 20 employees don’t have a confirmed deadline for switching to single touch payroll. However, small business advisors expect it to be compulsory from 1 July 2019. Businesses with more than 20 employees switched to single touch payroll on 1 July 2018.
Your options for switching to single touch payroll
To be ready for the switch, you’ll need to make sure you can submit compliant reports every payday. Here’s what it means:
If you would like to discuss how to become compliant with the new regulations, please get in touch with Straightline.
This article was orignally posted on xero.com
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