The Australian Tax Office has made it mandatory for any business operating with a staff capacity of more than 20 employees to implement a working Single Touch Payroll solution on or before July 1, 2018.
The first step is to do a headcount of your payroll employees on 1 April 2018. If the headcount is 20 or more, then you are a ‘substantial employer’ and will have to report through STP. If it is 19 or less, then reporting through STP will be optional until 1 July 2019. After that, it becomes mandatory for every employer to report through STP which is of course subject to changes in the legislation.
The ATO then matches this information set to the corresponding employer/ employee profiles. As a result, businesses will no longer be required to complete payment summaries at the end of the financial year as it will have already been done and available to employees through myGov.
A regular pay cycle (pay event) is when an employer carries out payroll at fixed regular intervals to remunerate employees. This is usually weekly, fortnightly or monthly.
When you start reporting through your Single Touch Payroll-enabled solution, your pay event will need to include minimum reporting requirements in order for the ATO to receive the file.
The employer must report the year-to-date values of gross salary or wages, allowances or other payments (as relevant), deductions and PAYG withholding for each employee included in each pay event.