Understanding the implications of STP

Understanding the implications of STP

Cheryl Knight

With dates confirmed for Single Touch Payroll to roll out to small businesses with less than 20 employees from 1 July 2019 and 1 July 2018 for employers with more than 20 employees, Carbon Group partner Cheryl Knight helps answers some common questions.

What is it?

When any “pay event” happens, details will be reported to the ATO.

When do we pay PAYG?

This is a report-only function. Business will still pay their PAYG when they lodge their BAS or IAS. Eventually, once the reporting is proven to be working (may take some time) then the BAS will pre-fill for you.

What about payment summaries?

The end game is for no payment summaries to be required. Again this may take some time, even years before this can happen. Eventually, we will simply tick “final payrun” and the figures will be reported as last figures (or payment summary) to the ATO.

What if I make errors or need to change a pay that has already been reported?

Adjustments will need to be made in the current period and your software will always send ‘Year To Date’ totals to the ATO.

What is reported?

Gross wages, PAYG, TFN and employee address are all reported. Superannuation amounts will also be reported.

What if there is Non-paid super?

The ATO has been testing getting bulk data from superannuation funds. This reporting capability was setup under super stream. Once STP is up and running the data coming back from the super funds will be matched against payroll information and the ATO will be able to check for non-payment. This will allow the ATO to chase non-payers and instigate more in-depth audits for those that need them.

When does this start?

The STP legislation was passed in September 2016. The software from the ATO side has been tested as of 1 July 17 at beta sites.

Businesses will start reporting on 1 July 2018.

  • Dates to remember –
    • 1 April 2018 – All businesses to do a head count of staff. (How many staff are you paying?)
    • 1 July 2018 – Any businesses with more than 20 staff will start reporting back to ATO at each pay event
    • 1 July 2019 — Any businesses with less than 20 staff will start reporting back to ATO at each pay event (this has recently changed, previously we were advised that businesses employing under 20 staff would not be reporting. This could have something to do with the first lot of data coming back from the super funds confirming that 5-6 per cent of all super that should have been paid was not paid by businesses to their staff.)

How does STP affect bookkeepers?

Software products will change to suit STP. Setting up new staff – TFN and addresses etc. will all be mandatory fields so you will need to enter these details before you can pay someone.

We are expecting bookkeepers to have extra work to do:

  1. Getting all clients on the correct/current software.
  2. Businesses will have to get bookkeepers involved as soon as they start to employ staff so that they are reporting correctly to the ATO.

Cheryl Knight, partner, Carbon Group

Understanding the implications of STP
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