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ATO Get ready for Single Touch Payroll
March 2018

ATO Get ready for Single Touch Payroll

Single Touch Payroll (STP) is mandatory for ‘substantial employers’ (those with 20 or more employees) from 1 July 2018.

To find out if you are a substantial employer, count the employees on your payroll on 1 April 2018. You do not need to send us your headcount information. However, you may want to keep a copy for your own records.

  • Count each employee as per the definition below.
  • The headcount is a bit like the census. You can do it after 1 April, but you need to count the employees who were on your payroll on 1 April.
  • Once you become a substantial employer you will need to continue reporting through STP even if your employee numbers drop to 19 or less – unless you apply for and are granted an exemption.
  • You don’t need to send us your headcount information. This is for you to determine if you need to start STP reporting from 1 July 2018. You may want to keep a copy for your own records.
  • If you are part of a company group, you must include the total number of employees employed by all member companies of the wholly-owned group.

How to count your employees

Include in headcount:

  • full-time employees
  • part-time employees
  • casual employees and seasonal workers who are on your payroll on 1 April and worked any time during March. There are exemptions to counting seasonal workers who were employed for a short-time only.
  • employees based overseas
  • any employee absent or on leave (paid or unpaid).

Don’t include in headcount:

  • any employees who ceased work before 1 April
  • casual employees who did not work in March
  • independent contractors
  • staff provided by a third-party labour hire organisation
  • company directors
  • office holders
  • religious practitioners

Directors, office holders and religious practitioners are not included in the headcount. They are not considered employees within the common law meaning of the term.

However, when you start reporting through STP you will need to report their payment information. This is because the payments are subject to withholding and are currently reported in the Individual non-business payment summary.

Get ready for STP checklist

  1. Speak to your payroll software provider
  • Find out how your payroll software provider will offer Single Touch Payroll (STP) reporting – this may be through an update to your existing software, or an additional service.
  • Check if they have a deferred start date for your product.
  • Find out what support they will offer to their clients to transition to STP.
  • Subscribe to their communications – this may be email, newsletter or web updates.
  1. Connect with the ATO
  1. Review your business processes
  • Make sure the right people in your business know about Single Touch Payroll – especially your payroll staff.
  • Check if you are paying your employees correctly.
  • Check if you are calculating your employees’ super entitlements correctly.
  • Check if you are addressing overpayments correctly.
  • Is your employee information accurate, including names, addresses, date-of-birth records?
  1. Apply for more time if you need it
  • If your software will be ready, but you won’t, you will need to apply to the ATO for a deferred start date.
  • If your payroll software provider has a deferred start date, and you still need more time, you will need to apply for your own deferral.
  • Make sure you follow the ATO guidelines and provide all the evidence required. The ATO will only provide deferrals for extenuating circumstances.
  1. Update your software when it is ready, and start reporting to the ATO
  • The ATO will help and support you through your first year of reporting.
  • It’s ok if you make a mistake – you will be able to make corrections.
  • The first year is a transition and penalties will generally not apply.
Please contact us should you need advice
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