Compulsory Reporting Change for Employers

 

The introduction of Single Touch Reporting (STPR) creates significant changes for how businesses across Australia must report their employees’ tax and superannuation to the Australian Tax Office. It means employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO, directly from their payroll solution at the same time they pay their employees.

Points to consider:

  • Employers may need to update their payroll solution to report through Single Touch Payroll.
  • For employers with 20 or more employees, Single Touch Payroll reporting starts from 1 July 2018
  • For employers with 19 or less employees: The Australian Government has announced it will expand Single Touch Payroll to include these businesses from 1 July 2019. This will be subject to legislation being passed in parliament.

Single touch payroll: A comparison of new and current requirements

STP Requirements from 1 July 2018 Current Law
Reporting amounts paid and withheld Reporting amounts paid and withheld
Substantial entities (20 or more employees) are required to report the following information to the ATO:

  • withholding amounts and associated withholding payments, on or before the day by which the amount is required to be withheld
  • salary or wages and ordinary time earnings information on or before the day on which the amount is paid, and
  • superannuation contribution information on or before the day on which the contribution is paid.
Employers generally are required to withhold amounts from an employee’s salary at the time they pay the salary. At a later date, they are required to notify the ATO of the amount withheld, remit these amounts to the ATO, provide each employee with an annual payment summary and provide an annual report to the ATO.
Employers that report these obligations (including those that voluntarily report) will not need to comply with a number of other reporting obligations under the existing law. 

For the first 12 months, reporting entities will not be subject to administrative penalties, unless first notified by the ATO.

Employers generally have an obligation under SISA Pt 3B and the SIS Regulations to report, consistently with certain data standards, superannuation contribution information to superannuation funds on the same day as the employer makes a contribution to the fund. Employers do not generally have an equivalent reporting obligation to provide employee-level superannuation contribution information to the ATO.

Employers must lodge SG statements with the ATO if they have an SG shortfall for a quarter, or if required to do so by the ATO under the SGAA.

Choice of fund Choice of fund
An employee may make a valid choice of superannuation fund by providing the relevant information to the ATO.

In this situation, the ATO may disclose an employee’s TFN and protected information to their employer.

In order to make a valid choice of superannuation fund, an employee must provide their employer with written notice of that choice.

This is a lot of information to try and absorb and understand on your own. We recommend that you speak to your accountant well before the new financial year, so that you are prepared to meet these new reporting obligations. If you would like some help deconstructing this, our accounting team is more than happy to be of service so please, book a consultation.

Ellen Mubwandarikwa

Ellen Mubwandarikwa