Real time reporting to the ATO of payroll and superannuation information will soon be a requirement as Single Touch Payroll becomes mandatory from mid-2018.
Instead of providing the required ATO information through activity statements and year-end Payment Summary reporting, your payroll system needs to provide the information through Single Touch Payroll. It will provide the ATO:
- Real time data access
- Extended reporting detail
- Early intervention engagement with employer and employee alike
- Increased use of data analytics over the payroll information provided.
“Employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to us directly from their payroll solution at the same time they pay their employees”, Australian Tax Office
When is it required?
Single Touch Payroll will be mandatory from 1 July 2018 for employers with 20 or more employees based on a head count at 1 April 2018.
The government has expressed the intent to make it mandatory for employers of less than 20 staff from 1 July 2019. This is subject to legislation being passed.
Why is it important?
Single Touch Payroll will require significant changes in both the way that employers report information and the level of detail being shared with the ATO.
As part of the ATO’s Client engagement strategy, they will be sharing information and communicating directly with employees about their PAYG withholding and calculation of Superannuation.
Businesses are exposed to risk associated with errors or reporting anomalies, which may prompt early intervention audits. Businesses may not be aware of compliance discrepancies until it’s too late and audits will be the direct result of data matching rather than based on a random selection.
What should businesses do now?
To ensure businesses are prepared, you should consider these areas:
- Technology – Review your technology and make sure it is Single Touch Payroll-enabled
- Data – Undertake a quality review as soon as practical to ensure the quality of historical reporting. This will provide a good indicator of potential future issues
- People – Educate your people on the requirements and the systems to ensure compliance
- Process – Refine your processes to ensure quality of data is sufficient for real-time scrutiny.
Want to know more?
More information can be obtained directly from the ATO website.
Would you be interested in attending a seminar hosted by Printing Industries about Single Touch Payroll?