AFEI Employers Adviser Articles

 

The Australian Tax Office (ATO) and Single Touch Payroll

Published: 23 April 2015

 

The Federal Government is planning changes to tax and superannuation reporting obligations through the introduction of an application called “Single Touch Payroll” (STP).


Under this contentious proposal it is planned that employers’ accounting software will automatically report payroll information to the ATO when employees are paid.


The ATO envisages this will eliminate the need for employers to report employee-related pay-as-you-go withholding (PAYGW) in their activity statements throughout the year and employee payment summaries at the end of the year.


In addition, the announcement said the Government will streamline tax file number declarations and Super Choice forms by providing digital services to simplify the process of bringing on new employees.


Significantly, the Federal Government also signaled it is considering requiring employers to remit PAYGW and the Superannuation Guarantee Contribution at the same time employees are paid their wages. This has the clear potential to present cash flow problems for many businesses, in addition to the costs and complications arising from the need for payroll and accounting software which conforms with the ATO's reporting requirements.


This proposal is another strong indication from the ATO that Australian businesses are being moved to digital record keeping, reporting and payment systems by the ATO. STP comes on the back of the Government’s recently introduced SuperStream reporting which fortunately was modified to allow business
less demanding time frames in meeting its requirements.


STP is scheduled to be available from July 2016 (with transitional provisions) apparently on the assumption that most employers will already be compliant with the SuperStream electronic reporting requirements by then. To meet their obligations under STP employers would be required to use, and if necessary acquire, compliant payroll software.


The Government has yet to make final decisions on STP implementation. Current indications are that with the introduction of STP, simultaneous payment with reporting will not be mandatory, but opt-in.


For more information and a copy of the ATO discussion paper which was issued for consultation with business, see: http://lets-talk.ato.gov.au/single-touch-payroll-discussion-paper

 

 

More information:

Call the AFEI Hotline on 02 9264 2000 with your queries, including any questions you would like us to put to the ATO.


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