Since 1 July 2018, employers with 20 or more employees have been required to complete Single Touch Payroll (STP) reporting for each pay event. Now legislation has been passed so that businesses with up to 19 employees are legally required to complete STP reporting from 1 July 2019. The new legislation also extends the scope of STP reporting to include some salary sacrificed amounts.

What information is required to be included on STP reporting?
From 1 July 2019 your payroll software should be including the following information for each employee paid in a pay event when submitting the corresponding STP reports for the ATO:

1. Gross salary/wages – including non deductible allowances
2. Deductible allowances – these must be categorised as travel, car, meals, laundry, transport or other
3. Director remuneration
4. Payments for unused annual or long service leave
5. Lump sum E backpayments
6. Parental leave pay
7. Payments to office holders and or religious practitioners
8. Return to work payments to individuals
9. Employment termination payments (ETP) – this is optional for death benefit ETP’s
10. PAYG withholding
11. Deductions
12. Amounts salary sacrificed
13. Employer super guarantee liability – if your system doesn’t allow this to be reported you report the ordinary time earnings amounts, or you can report both
14. TFN or TFN exemption code

In some instances foreign employment income should also be included in STP reporting.

Your payroll software will report the year to date amounts for each payment type each payrun to the ATO via Single Touch Payroll (STP) reporting. STP reports will also be made at the time you pay the PAYG withholding to the ATO and your super contributions.

Note it is not mandatory to report payments to contractors via STP, however if you are paying contractors via your payroll then it would be best to do so.

Are there any STP reporting exemptions?
The ATO has indicated it will consider employers requests for exemption from STP reporting for a financial year or for STP reporting for a specific employee or group of employees.

Employers located in areas lacking viable internet connections can also apply to the ATO for an exemption on STP reporting for one or more financial years.

Exemption requests can be submitted by the employer using the Business Portal or through a registered tax or BAS agent. The following information should be included when submitting an exemption:

1. The number of employees on the payroll
2. Details on why you are not able to report through STP
3. What (if any) steps you may have taken to try to get STP ready
4. If the exemption if being requested for reporting a specific employee or group of employees you also need to include details on the employee/s, the nature of their employment and supporting documentation where available.

Solutions for Micro Employers (1-4 employees)
The ATO recognised that micro employers may not be using payroll software at present, which would limit their ability to meet STP requirements. To address this, they have asked payroll software providers to develop no-cost and/or low-cost solutions (for no more than $10 per month) to fill this niche. Also, they will allow micro employers to use their registered tax or BAS agent to report their STP data on a quarterly basis, instead of at the time of each pay event, until 30 June 2021.

You can check out the ATO list of software providers who have developed or are developing STP solutions for micro employers at https://softwaredevelopers.ato.gov.au/product-register.

Transition Period
Employers with under 20 employees are technically required to commence STP reporting from 1 July 2019. However the Commissioner of Taxation has indicated that these businesses can start reporting through STP any time from 1 July 2019 to 30 September 2019. No penalties will apply for incorrect, missed or late STP reporting during the first year.

Employees with 20 or more employers have been required to report via STP since 1 July 2018, with their transition period ending 30 June 2019.

ATO authority to advise employees of employer’s SG compliance history
Underpayment or non payment of superannuation guarantee compliance is treated seriously. Chapter 2 of the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 provides the ATO with a new authority to advise current or former employees who have lodged a complaint about superannuation guarantee non-compliance by their employer of the employer’s super guarantee payment and lodgement history. The ATO can also share the findings by the Tax Commissioner with these persons. This is otherwise protected information.

Note this authority is limited to releasing information to employees who have actually made a complaint.

Your Action Plan
If you don’t currently have STP compliant software, or you haven’t installed your software updates that bring in the STP functionality, this is a priority. Speak to your accountant or payroll team on how to get this happening.

The ATO has two helpful checklists to help you implement STP:

1. Get ready checklist – https://www.ato.gov.au/business/single-touch-payroll/start-reporting/stp-checklists/#Getreadychecklist
2. Start reporting checklist – https://www.ato.gov.au/business/single-touch-payroll/start-reporting/stp-checklists/#Startreportingchecklist

If you have any questions about how the new STP laws impact you or are not sure how to proceed with getting compliant, please get in touch. Call us on 03 5339 3200 or contact us here.

Thanks for reading.

By Genna Kidd

The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.