- Single Touch Payroll: Is your business ready?
Single Touch Payroll (STP) is a reporting framework whereby employers will automatically provide to the ATO payroll and superannuation information as and when employees are paid.
Where previously the ATO was provided information through activity statements and year end Payment Summary reporting, the introduction of STP directly through your payroll will provide the ATO:
- Real time data access.
- Additional reporting detail.
- Early intervention engagement with employer and employee alike.
- Increased use of data analytics over the payroll information provided.
STP will be mandatory from 1 July 2018 for employers with 20 or more employees based on a head count at 1 April 2018. STP will become mandatory for all employers by 1 July 2019.
Why is this change so significant?
Every business will be impacted by these changes. STP as part of the broader data matching and information sharing platform will have a significant change to business both in the way that employers report and the level of detail being shared with the ATO.
As part of the ATO’s Client engagement strategy, they will be sharing information and communicating directly with employees about their PAYG withholding and calculation of Superannuation.
This exposes businesses to significant risk associated with errors or reporting anomalies, which may prompt early intervention audits. Ultimately businesses may not be aware of compliance discrepancies until it’s too late and audits will no longer be a consequence of random selection, rather, a direct result of data matching.
What steps should you take?
Review your technology and make sure it is Single Touch Payroll compliant.
Undertake a quality review as soon as practical to ensure the quality of historical reporting. History is a good indicator of future issues.
Educate your people on the systems to ensure quality of data on a real-time basis.
Refine your processes to ensure quality data is available on a real-time basis.