Looking at the government’s Single Touch Payroll proposal
In December last year, the government released further information on their proposal to introduce Single Touch Payroll (STP), which involves streamlined electronic reporting of PAYG withholding and superannuation contributions for businesses.
These measures will provide the following benefits to businesses:
- Reporting of PAYG withholding to the ATO will be done automatically via business management / payroll software that is STP-enabled, rather than manual reporting
- Employers will have the option to pay their PAYG withholding at the same time they pay their staff
- Reporting of superannuation contributions will be automatically sent to the ATO when payments are made to super funds
- To assist with the transition to STP-enabled software, the government will provide a $100 tax offset to small businesses (annual turnover of less than $2 million) towards software purchases or subscriptions in 2017/18 financial year
Employees will also benefit from the proposal, as individuals will have the option of completing their Tax File Number (TFN) declaration and Superannuation Standard Choice forms online via myGov or through their employer’s STP-enabled software, instead of paper-based forms.
From 1 July 2017, all businesses will be able to opt-in to Single Touch Payroll reporting and medium – large businesses (those with 20 or more employees) will commence transitioning. The transition period will be 12 months, meaning that medium – large businesses must use STP-enabled software from 1 July 2018.
For small businesses (those with less than 20 employees), the roll-out timeframe has not yet been established.