Single Touch Payroll - Further Update
We wanted to provide you with a further update on Single Touch Payroll (STP). As previously advised back in July 2018, employers will commence reporting payroll information to the Australian Tax Office (ATO) during the 2018/2019 financial year.
This will not make any difference to how and when individuals get paid.
Employers are obligated to start using this new reporting system, but they are allowed to start at different times, depending on the number of individuals being paid at a certain point in time. Consequently, you may hear that some employers have already started.
What Church organisations will this STP ‘Go Live’ impact?
Larger employers (with 20 or more persons) need to use this system before 30 June 2019. Employers with less than 20 persons (subject to the Royal Assent of recently passed legislation) will be in this system by the following financial year.
All Uniting Church organisations that remunerate 20 or more persons should by now have reviewed their current payroll systems and ascertained whether they are capable of being upgraded to facilitate the STP reporting regime.
What can we do if our current payroll system is not STP compliant?
One alternative for those Church organisations whose payroll systems are not capable of upgrade is for them to consider transitioning their payroll functions across to the Payroll Bureau Service (PBS) currently operated by Uniting Resources.
The PBS is available to all Uniting Church organisations in NSW and the ACT and it has the capacity to undertake the processing of payroll and ensure that Uniting Church organisations are meeting their obligations under prevailing legislation. This will obviously include compliance with the Single Touch Payroll reporting regime.
Please refer to the PBS Brochure for further information PBS Brochure
Why these changes are important for you to know
The ATO will see whether or not the employer is:
- calculating superannuation amounts for individuals
- paying super into an individual’s fund
- withholding and also paying the individual’s tax to the ATO
The ATO will also see the year-to-date amounts of all wages, allowances, deductions and tax that individuals have received and/or have been deducted. Consequently, the ATO will be asking questions of any employer who doesn’t appear to be complying to this new system of reporting.
- Have you checked that your payroll is coded correctly to ensure that there are no superannuation guarantee (SG) shortfalls?
- Have you checked that your monthly/quarterly group tax (PAYGW) is accurate?
- Have all paid individuals completed and signed their TFN declarations? Where are they filed?
- Check if your payroll information is accurate and up to date.
What preparatory steps, if any, should paid individuals be undertaking in preparation for STP reporting?
Paid individuals are encouraged to make sure that they have a myGov account now.
It is not compulsory to have a myGov account. However, if paid individuals want to access their ATO Online provided information throughout the year they will need a myGov account.
They can access the website and set up a new account via the following links:
They can contact the ATO directly for a copy of their payment information, should they choose not to have a myGov account.
What happens to the end of year Payment Summary (Group Certificate)?
Once an employer has commenced reporting to the ATO through Single Touch Payroll, the employer does not have to provide paid individuals with an end of year payment summary. Paid individuals, or their Tax Agent, can prepare the tax return by using the ‘employment income statement’ which the ATO will provide directly through myGov and the ATO online service.
What are the operational impacts of STP?
STP will require a shift in the quality and reliability of data provided through your payroll system, and an increased level of engagement with authorities as the ATO explores and questions the payroll data.
Administrative penalties will apply if a STP report is lodged late, or if it contains an error or omission that is ‘false or misleading’.
Employers will now be reporting payroll data to the ATO every pay cycle (weekly, fortnightly, monthly, off-cycle).
- Your payroll software will need to be STP enabled and/or you will need to work with an alternative Payroll or STP provider.
- Employers using STP will no longer have to provide paid individuals with payment summaries at year end.
- You will no longer be able to submit Payment Summary information through the ECI or the ATO Business Portal.
- Paid individuals will be able to access their year-to-date information through the myGov portal.
- STP data will be used by the ATO to pre-populate information on your BAS.
None of this will make any difference to how and when individuals get paid.
But it does now open up every employer to an unprecedented ‘real-time’ level of scrutiny. Real-time reporting of payments and remittances, by extension, could also mean real-time reporting of errors. Currently, the ATO only plans to use STP to identify paid individuals claiming multiple tax-free thresholds and non-payment (as opposed to incorrect payment) of superannuation by employers. However, STP also gives the ATO the basis to access real-time visibility over the accuracy and timeliness of an employer’s payroll processes, as they pertain to tax remittances and superannuation payments.
STP will require your increased awareness around the quality and reliability of payroll data being provided for processing.
What is not changing?
STP is a reporting change, not a payment change. Consequently, existing payment processes and timings around payroll, superannuation, PAYG and BAS submissions will remain relatively unchanged.
We ask that you please review your current payroll software to confirm that it will be capable of supporting STP reporting.
If not, we would urge you to seriously consider transitioning your payroll functions across to the Payroll Bureau Service (PBS) currently operated by Uniting Resources.
Please contact the Synod Payroll Manager on firstname.lastname@example.org or alternatively, please call (02) 8267 4288 for further information. The cut-off for all expressions of interest (in utilising the PBS) has been extended from 31 December 2018 to 30 April 2019.