Single Touch Payroll is a reporting system that allows the ATO to get access to your business payroll data every single time you make a pay run. It's not necessarily more work for you, but you do need to make sure you've got the right systems in place to keep the tax man happy.
What is this about? The ATO want to gather as much information they can about what people are being paid and don't want to wait until the end of the year when the Payment Summaries are issued to know what you've been paying your staff. Single Touch Payroll is the name given to the reporting requirement of the ATO to provide them with a range of data each time you pay your employees so they are kept in the loop at all times. It also means that your staff can log in to their MyGov account and see what's being reported during the year.
What data is being sent? The data being provided will include things like:
- Employee name
- Gross wage
- Net wage
- PAYG withheld
- Deductions (e.g. union dues or workplace giving)
Reporting this data via Single Touch Payroll doesn't mean you need to change your pay cycle or fill in any extra forms, but it does mean that you need to being using compliant payroll software - the right software will automatically report the data to the ATO meaning you've got nothing more to do than simply process your payroll as you always have.
Which software will keep me compliant? Our favourite, Xero, is a great way to keep compliant and keep your payroll processing time to a minimum. They are transitioning all Xero payroll users over to Single Touch Payroll reporting over a 6 month period between 1 July 2018 and 31 December 2018 and have been granted an extension for anyone using Xero from the ATO. This means that if you need to be on Single Touch Reporting by 1 July and you use Xero, you're all good. All the rest of the major players will likely also have a solution in place, best check directly with them.
If you don't process your own payroll, preferring to outsource the function, double check with your provider that they are using a Single Touch Payroll compliant solution. Just in case.
When do I need to be "Single Touch Payroll compliant"? If you employee 19 or less employees you don't need to worry about this until 1 July 2019, though you can get started earlier (and if you're using a proper payroll solution you're likely ready to go now). However if you have 20 or more employees you've got to be compliant by 1 July 2018.
If you're unsure about what's required and would like to have a chat with someone to make sure your system is compliant with the new Single Touch Payroll requirements, get in touch today. We'd love to help.