1. Single Touch Payroll 2018 ICB Meeting
Paul Simon
Australian Taxation Office

2. Why is Single Touch Payroll so important?
Streamlining
Employee Entitlements
Fund
Reporting through natural business processes
On boarding new employees TFN and super choice through natural BMS
Prefilling W1 & W2 in BAS
Protecting SG entitlements
Earlier visibility of SG late or non-payments
Real Time Information
Levelling the Playing Field
Building a platform for sharing information to other agencies
Can help prevent tax and other debts e.g. welfare overpayments
Reduces unfair competitive advantage
Ensures employers meet their obligations
UNCLASSIFIED – Single Touch Payroll

3. UNCLASSIFIED – Single Touch Payroll
What you need to know
Who has to report?
Employers with 20 or more employees will be required to report through Single Touch Payroll.
The Australian Government has announced it will extend Single Touch Payroll to employers with 19 or less employees from 1 July This will be subject to legislation being passed in Parliament.
When do I start reporting?
Employers will need to do a headcount of the number of employees they have on 1 April If they have 20 or more employees on that date, they will need to start reporting to the ATO through a Single Touch Payroll-enabled solution from 1 July 2018.
Which employees do I include?
All employees within the ordinary (common law) meaning of ‘employee’. Excludes independent contractors, staff provided by a third party labour hire organisation, company directors, office holders, religious practitioners or any employee who ceased work prior to 1 April.
What and how often do I have to report?
Payments such as salaries and wages, pay as you go (PAYG) withholding and super information at the same time you pay your employees.
What wont I have to do if I report through Single Touch Payroll?
Employers may not need to provide the ATO with an end of year payment summary.
UNCLASSIFIED – Single Touch Payroll

4. What is changing?

5. How does Single Touch Payroll work?
Natural business process
Employee
Payment to fund
Fund
Salary or wages
Payslip
Employer completes their payroll run through their Business Management System (BMS)
Bank
Employee
Commencement
Employers will have the option to invite new employees to complete their Tax file number declaration and Superannuation standard choice forms online.
*currently being designed
BMS
Bank file
What’s new
Super contribution amounts reported to the ATO by the super fund
Tax and super information is sent to the ATO through Standard Business Reporting 2 (SBR2) every pay day.
Pay event
submission
Member Contribution Report
Member Account Transaction Service
Salary or wage information
Tax withheld
Super Guarantee liability
Employer information:
Employee information
Superannuation contribution
UNCLASSIFIED – Single Touch Payroll

6. How the data will be used
Information reported through Single Touch Payroll will be available for employees, employers and their agents through various platforms
Information will be pre-filled into myTax
Employees will be able to view their tax and super information
Pay event submission
Information will be prefilled W1 and W2 Labels
*as of 1 July 2019
Information reported through STP will be displayed
in the Tax Agent and Business Portals
Sharing of data with other Commonwealth agencies
UNCLASSIFIED – Single Touch Payroll

7. What you will see Examples of what you’ll be able to see BAS AP
BAS/TA
Portals
Business
Portal
BAS AP
Employer
Screens will vary depending which platform you’re using
UNCLASSIFIED – Single Touch Payroll

8. Helping employers to comply

9. Correcting a payroll event report
We acknowledge there will be times your clients need to change the information they have reported
Correcting a payroll event
Must report within 14 days of detection
Report at next pay cycle
Report as an ‘update event’
Activity Statements
Where amounts pre-filled at labels W1 and W2 in activity statements do not reflect payroll records for the relevant activity statement period employers will need to fix those amounts when they complete their activity statement.
Employers only need to adjust the pre-fill in activity statements if the amount of the correction is over the materiality threshold (thresholds to be confirmed).
Large withholders follow existing processes.
Unclassified – Single Touch Payroll

10. Finalisation Declaration
End of year finalisation
Employers will be exempt from providing payment summaries where information has been reported though Single Touch Payroll.
The information will be displayed as 'tax ready‘ for employees in ATO online services accessed through myGov. The information will be also be pre-filled in income tax returns.
Finalisation Declaration
Tax Ready
Employers make a finalisation declaration by providing a finalisation indicator for an employee as part of their Single Touch Payroll reporting.
Amendments after finalisation
If an employer identifies the need to amend details after making a finalisation they submit an update event with the updated details and ‘re-finalise’.
Finalised information reported through Single Touch Payroll can be amended up to five years after the end of financial year.
Employers will need to provide a payment summary for any payments not reported through Single Touch Payroll.
UNCLASSIFIED – Single Touch Payroll

11. Co-operative learning Timely and constructive
Our approach
STP implementation
Data integrity
We’ll focus on supporting developers and employers to transition into STP smoothly
We will be supporting employers with “health checks”
We will assist employers to be confident with their data
Co-operative learning
Timely and constructive
feedback
We will provide constructive feedback to employers
We will be timely and selective in engaging
with you when we notice anomalies
We will learn as more reports are received
We are trialling treatments with volunteer employers
UNCLASSIFIED – Single Touch Payroll

12. How we will tailor your experience
We will tailor our engagement to your behaviours over time
High Trust
Green Lane
We will encourage and support you in maintaining a good client experience
with the lightest touch possible.
Help & Assist
Orange Lane
We will provide tailored support and assistance to help you meet your obligations with the larger aim of helping you move towards the ATO’s target engagement behaviours.
Poor Compliers
Red Lane
We will apply the law firmly and fairly to your non-compliance behaviours,
while responding to indicators of positive engagement by providing help and assistance where that is warranted.
UNCLASSIFIED – Single Touch Payroll

13. What your experience might look like
Our treatments will range from reminders and nudges to more directive interventions where needed.
SMS example:
Correspondence example:
UNCLASSIFIED – Single Touch Payroll

14. Deferrals and Exemptions

15. Digital Service Provider (DSP) Payroll Service Provider or Tax Agents
Deferrals
How to apply
Digital Service Provider (DSP)
Employers
Payroll Service Provider or Tax Agents
Key Points:
Where a DSP has been granted a deferral, they will provide their Deferral Reference Number (DRN) and deferred date to their clients on ATO letterhead. This will ensure employers are confident they have a deferral in place.
Generally, the maximum time granted for a deferral will be 12 months
Where a deferral is granted, employers must commence reporting by the deferred due date
Information on how to apply for a deferral has now been published on ato.gov.au
UNCLASSIFIED – Single Touch Payroll

16. Exemption from STP reporting
The Commissioner may grant a exemption if an employer is unable to report through Single Touch Payroll.
Generally for a full financial year and would most likely need to be reassessed each year.
Can be for class of employers or on an individual basis such as:
Seasonal employers
Internet accessibility
Other existing lodgement and payment obligations must be met.
Exemption criteria is currently in draft and is subject to consultation
Key point:
We are currently working through the criteria and more information will be available soon
The Commissioner is able to provide different types of exemptions. For example, the Commissioner may exempt:
a class of entities from STP (by legislative instrument).
a class of entities, in relation to specific STP reporting requirements (by legislative instrument)
an entity (employer) from STP due to its individual circumstances.
an entity (employer), in relation to specific reporting requirements due to its circumstances.
Potential classes identified through consultation include:
Seasonal
Directors
International inbound secondments
Potential criteria for individual exemptions may include:
Remote location
Internet accessibility
IT literacy
Software delays
Criteria for a temporary exemption may include:
Natural disaster
Internet or external system issues
UNCLASSIFIED – Single Touch Payroll

17. Preparing for Single Touch Payroll

18. X How to do your headcount on 1 April 2018 Include: Do not include:
Part time employees
Casual employees who are on your payroll on 1 April 2018 and worked during March 2018
Employees based overseas
An employee absent or on leave (paid or unpaid)
Full time employees
Employees who ceased work before March 2018 prior to 1 April
Casual employees who did not work in March 2018
Independent contractors
Staff provided by a third party labour hire organisation
Company directors, office holders or religious practitioners
Include:
Do not include: X
UNCLASSIFIED – Single Touch Payroll

19. Employment Commencement*
The Single Touch Payroll Timeline
Start Date
Small Business
start date*
ATO correspondence
Employment Commencement* 1
JULY 1
JULY
MAR
JUNE
2018
2019
*Transitional Period 1
APR 1
JULY
Intent of slide: to let the audience know what’s coming up on the STP horizon
ATO Correspondence:
During March, the ATO will write to substantial employers letting them know it’s time to get ready’
You may recall receiving correspondence in October 2017
1 April Headcount:
Employers will need to count the number of employees who are on their payroll on 1 April 2018 to find out if they are a ‘substantial employer’. This is a headcount of employees, not a count of the full time equivalent (FTE).
Employers can do the headcount after 1 April. They just need to count the employees they have on their payroll on that date.
This is a self-assessment and employers are not required to notify the ATO of their employee numbers.
June Employee Commencement:
We’ve pushed it back a little - still designing
Reliance on DSP build – not all will offer a solution
This is voluntary
1 July start date:
Employers with 20 or more employees need to start reporting
BAS pre-fill:
Confirming timing on this but at this stage it’s looking like this will commence in July 2019
SB Business start date:
This is still subject to legislation being passed
*Transitional period:
There is a 12 month transitional period in which a substantial employer will not be subject to failure to lodge penalties, unless the ATO has issued a written warning notice.
Employee Headcount
BAS pre-fill
Commences*
*Small Business - subject to legislation being introduced and passed
*Employee Commencement timing to be confirmed
*BAS pre-fill timing to be confirmed
UNCLASSIFIED – Single Touch Payroll

20. The STP Checklist

21. The Single Touch Payroll Checklist#1
Speak with your provider
Find out how your payroll software provider will offer Single Touch Payroll reporting - this may be through an update to your existing software, or an additional service
Check if they have a deferred start date
Find out what support they will offer to their clients to transition to Single Touch Payroll
Subscribe to their communications – this may be , newsletter, web updates #2
Talk to your tax professional
Find out how they can help you prepare
Subscribe to their communications – this may be , newsletter, web updates #3
Plan your transition
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?
Intent of slide: let the audience know that there are things they can be doing now to prepare for STP
Speaking with your provider:
Understand their intentions – what’s happening with your solution
When will your solution be ready?
Speak with your tax practitioner:
How can they help you transition?
Many practitioners are communicating now with their impacted clients
The ATO will be supporting tax practitioners over the coming months
Plan your transition:
Do you need to review some of your payroll processes?
Do you have a plan in place – will you be updating your software, using a third party provider?
Keep up to date with the ATO:
We are regularly updating our web content with information that will help you prepare, so check ato.gov regularly
ato.gov.au will be your best place to seek information – new web content just published in mid-Feb
We will be holding a series of webinars over the coming months
Events:
We plan to hold a series of informative topic based webinars to help employers better understand the changes and impacts of STP
Keep updated with events your tax professional or solution provider might be hosting – we speak at a range of different events like this #4
Keep up to date with ATO
Visit ato.gov.au/singletouchpayroll and subscribe to any updates
Follow the ATO on Facebook, Twitter and LinkedIn
Make sure the ATO has the right contact details for your business or organisation
UNCLASSIFIED – Single Touch Payroll