Single Touch Payroll Employer Obligations Payroll Seminars October

Single Touch Payroll Employer Obligations Payroll Seminars October 2017

What will be covered in this session › Overview of Single Touch Payroll › The benefits › The legislative Framework › How it works › What data is reported › Corrections Framework / Reporting a fix › Deferrals and Exemptions › Superannuation Reporting › Timeline › Questions UNCLASSIFIED – Single Touch Payroll

Single Touch Payroll reporting starts from 1 July 2018 for employers with 20 or more employees. On 29 August 2017, the Government announced it will extend Single Touch Payroll to employers with 19 or less employees. If an employer has 19 or less employees, they can choose to report through Single Touch Payroll for now. These employers will be required to transition to Single Touch Payroll from 1 July 2019. Single Touch Payroll is a reporting change for employers. 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. 3 UNCLASSIFIED – Single Touch Payroll

Benefits of Single Touch Payroll › Enable a more level playing › Employees can access tax and › Payment summary relief › Online employee › Prefilled Business Activity › Simplified Reporting field Statements (BAS) UNCLASSIFIED – Single Touch Payroll super information online commencement

The legislative framework for Single Touch Payroll › Employers with 20 or more employees (‘substantial employers’) must use Single Touch Payroll from 1 July 2018 › Number of employees based on head count on 1 April 2018 › The Australian Government has announced it will extend Single Touch Payroll to employers with 19 or less employees from 1 July 2019 (subject to passive of legislation) › 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 2018 › Employers may not need to provide the ATO with an end of year payment summary UNCLASSIFIED – Single Touch Payroll

How Single Touch Payroll works The employer will pay the PAYG withholding liability Employer completes their payroll run through their Business Management System (BMS) PAYG withholding liability will be raised after the BAS is lodged and will be visible via the portals Employee Salary or wages BMS Bank Payslip Bank file BAS BMS Sup tra er co n n sen sacti tribu ti t to on th data on e A TO to ATO Super Contribution transaction report Payroll Event Payment to fund Fund Employee will be able to view their employer’s super contributions via ATO Online Services. Employer data will be used to prefill W 1 and W 2 on the business activity statement (BAS) Large Withholders: W 1 label will be removed Payroll Data • Salary or wage information • Tax withheld • Super Guarantee liability Member Account Transaction Service Member account Transaction data • Employer information • Employee information • Superannuation contribution UNCLASSIFIED – Single Touch Payroll Matched records will be allocated to accounts.

What data is reported? Payroll event Payment Summary Current transaction > > STP Payroll service Reuse of information Employer W 1 W 2 TFN Declaration Employer information Employee information Payment information TFN Declaration information Employee Employers/Intermediaries Payment Summary Super Guarantee Employees/Intermediaries SBR 123456789 > > UNCLASSIFIED – Single Touch Payroll Prefilled W 1 and W 2 on the activity statement for Small and Medium Withholders Large withholders no longer required to lodge BAS as W 1 information already submitted TFN Declaration ATO Prefilled income tax returns in my. Tax for self preparers Prefilled income tax returns via SBR/PLS for tax agents. Fin.

Corrections Framework Agreed principles › The corrections framework should support current business payroll processes (where possible) › Errors which relate to an employee‘s payroll should be reported in the following payroll event or via the “update service” › Errors which relate to an employer’s PAYG W liability and Gross payments should be able to be corrected in the relevant BAS period and large withholding payment period 8

Reporting a fix through STP There are times when correcting payroll reports to the ATO will be required. The rules for reporting a fix are: 1. An employer should report a fix within 14 days from when the issue is detected. 2. An employer may choose to report a fix in the next regular pay cycle for an employee, where this is later than 14 days from when the error is detected. Additional time will be allowed to the next regular pay cycle for the employee. E. g. monthly pay cycle 3. An employer may report a fix in an update event. UNCLASSIFIED – Single Touch Payroll 9

Applying for an exemption The Commissioner of Taxation may grant an exemption from Single Touch Payroll reporting. Some examples where an exemption may be granted include: › employers located in rural areas with no reliable internet connection › employers that are only substantial employers (20 or more employees) for a short period of the income year, for example, due to harvesting activities › employers that have been impacted by a natural disaster to which an exemption may be granted for a period of time UNCLASSIFIED – Single Touch Payroll 10

Changes to Superannuation reporting Super Fund On 29 August 2017 The Minister for Revenue and Financial Services announced a package of superannuation changes that focus on safeguarding Superannuation Guarantee worker entitlements. This announcements means employers do not need to report Superannuation Guarantee payments through their Single Touch Payroll enabled software, with superannuation funds to report contributions received more frequently, at least monthly, to the ATO. This will enable the ATO to identify non-compliance and take prompt action UNCLASSIFIED – Single Touch Payroll 11

Implementation Timeline Limited Release Additional Functionality A limited release began for a small number of Digital Solution Providers and their clients. Additional functionality will be added and Digital solution providers will start releasing their solutions from October into 2018 1 JUL 1 OCT 2017 Employee Commencement STP Implementation Employee commencement services Superannuation Contribution Reporting TBC Employers with 20 or more employees will need to start reporting through STP MAR 1 JUL 2018 1 July 2019 UNCLASSIFIED – Single Touch Payroll Mid OCT LATE OCT 1 APR Employer Web Content ATO Correspondence Employee Headcount The ATO will publish detailed web content focused to employers on ato. gov. au The ATO will write to all substantial employers to inform of their reporting obligations. Employers need to do a headcount of the number of employees they have on this date. Single Touch Payroll extended to employers with 19 or less employees (subject to legislation being passed in Parliament) 12

Questions

Further Information Please contact us if you have any further questions. Single. Touch. Payroll@ato. gov. au For further information about Single Touch Payroll please visit our website: www. ato. gov. au/singletouchpayroll 14