A recent study shows 75% of businesses aren’t ready for Single Touch Payroll. Here’s what you need to do to be ready.
Single Touch Payroll (STP) is mandatory for ‘substantial employers’ (those with 20 or more employees) from 1 July 2018.
Count the employees on your payroll on 1 April 2018:
First of all you need to do a head count of your employees at 1 April.
Count each employee, not the full time equivalent (FTE).
Once you become a substantial employer you will need to continue reporting through STP even if your employee numbers drop to 19 or less – unless you apply for and are granted an exemption.
How to count your employees
Include in headcount:
- full-time employees
- part-time employees
casual employees and seasonal workers who were on your payroll on 1 April and worked any time during March – there are exemptions to counting seasonal workers who were employed for a short-time only
employees based overseas
any employee absent or on leave (paid or unpaid).
Don’t include in headcount:
- any employees who ceased work before 1 April
- casual employees who did not work in March
- independent contractors
- staff provided by a third-party labour hire organisation
- company directors
- office holders
- religious practitioners.
Directors, office holders and religious practitioners are not included in the headcount. They are not considered employees within the common law meaning of the term.
Get ready for STP checklist
Speak to your payroll software provider:
Find out how your payroll software provider will offer STP reporting – this may be through an update to your existing software, or an additional service.
Check if they have a deferred start date for your product.
Find out what support they will offer to their clients to transition to STP.
Review your business processes:
You neeed to make sure the right people in your business know about STP – especially your payroll staff.
Check the following
You are paying your employees correctl
Employees’ super entitlements calculating your e correctly.
Check if you are addressing overpayments correctly.
Is your employee information accurate, including names, addresses, date-of-birth records?
You can apply for more time if you need it
If your software will be ready, but you won’t, you will need to apply to us for a deferred start date.
If your payroll software provider has a deferred start date, and you still need more time, you will need to apply for your own deferral.
Make sure you follow the ATO guidelines and provide all the evidence required.
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