This year the ATO is launching what Assistant Commissioner John Shepherd calls a “game-changer” in the employer-ATO relationship.
Starting on the first of July 2018, employers with 20 or more employees will be making the switch to Single Touch Payroll when reporting to the ATO. This means bigger salons will be needing to make this switch very soon, while businesses with fewer than 20 employees will have to make the change by mid-2019, but can elect to switch sooner if their software is updated.
Allow us to explain what Single Touch Payroll will look like. Each time your employees are paid you must send their tax and super information to the ATO via your personal payroll solution. Mr. Shepherd says the company wants “employers to meet their reporting obligations by using their own payroll and accounting software.” He has thus shared important steps to take now in preparation for the change in July, and urges you to do so.
The ATO stresses that the first step in preparing for the STP is taking an employee headcount, which must be done by the first of April 2018. You can then update your payroll solution when it is ready, and begin reporting through Single Touch Payroll from the first of July 2018. The information included will be wages and salaries, allowances, deductions, pay as you go withholding, and superannuation information. There will be no need for a change in pay cycle. Feel free to continue paying employees weekly, fortnightly or monthly.
You also don’t have to provide payment summaries to your employees. Salon workers will be able to access their payment information through their myGov account or can request a copy of this information directly from the ATO using their online services.
The ATO is trying to make this transition as smooth as possible, with most employers able to easily update their existing payroll software to a version that is Single Touch Payroll ready. Look out for intel from your software or payroll service provider, which will tell you when the payroll solution is ready for your salon. With this knowledge, you may have the option to report through Single Touch Payroll before July.
We know that any change to taxation processes can feel overwhelming (when it doesn’t have to be) and as such the ATO has provided factsheets, checklists and information packs. Take advantage of the extra knowledge before Single Touch Payroll hits your business.