A new ATO initiative is called Single Touch Payroll (STP) which requires businesses and employers to report staff salaries, wages and PAYG withholding amounts to the ATO at the same time they pay their employees.
It will be mandatory for employers with 20 or more employees to use STP reporting from 1 July 2018 with optional reporting from 1 July 2017. It is optional for employers with 19 or less employees to use STP.
Payroll software will be STP enabled to report the required information to the ATO after a payroll run by the employer whether the payroll cycle is weekly, fortnightly or monthly.
The ATO will have up to date payroll information of employers.
The ATO outlines the benefits of STP as providing employees with visibility of their year to date salary and wage income, PAYG withholding amounts and super guarantee contribution amounts although employees are already provided with this information on their payslips.
It is likely employees will see this information through their mygov account.
STP will enable employers and employees to be more assured that all eligible businesses are meeting their obligations as it will be easier for the ATO to match the PAYG withholding amounts to the employer’s business activity statement reporting and payments. STP is also meant to help streamline the employee commencement process in relation to providing forms such as the TFN declaration and Super Choice to their employer.