Changes to Payroll Reporting

From 1 July 2018, employers will be required to comply with the ATO’s Single Touch Payroll Reporting (STPR). The STPR will streamline the way that employers report tax and superannuation information to the ATO.

The compulsory switch will apply to businesses who have more than 20 employees and, from 1 July 2019, for businesses who have less than 20 employees.

These new requirements will create significant change in how businesses report information to the ATO. STPR means employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO directly from payroll solutions (MYOB, Xero etc.) at the same time as employees are paid.

The changes include:

  • Employers will need to ensure they have SBR(Standard Business Reporting)-enabled software to comply with their PAYG withholding obligations;
  • Various pay categories (Ordinary Time Earnings, salary and wages, allowances, deductions, superannuation information and Pay-As-You-Go (‘PAYG’) withholding information) will be reported when payroll is periodically processed by the employer;
  • New employees will have the option of completing TFN declarations and Super Choice forms online;
  • The STPR reports for PAYG withholding will become the approved form for reporting PAYG withholding (currently this information is in the Activity Statement);
  • Employers that have reported their PAYG withholding obligations via STPR will have their PAYG withholding prefilled by the ATO on their BAS;
  • Large withholders (withheld more than $1M in the previous financial year) will no longer report PAYG withholding on their activity statement;
  • Employers will no longer need to provide payment summaries to employees, as these will be made available as part of their payroll information in their myGov account; and
  • Employers will no longer be required to submit an annual PAYG report to the ATO.

Embracing the change  

The compulsory changes will eventually affect all businesses. It is important to keep ahead and understand the changes and how these will affect your business. These changes may mean additional cost for employers, particularly those who are not currently using an up-to-date payroll software system. The ATO are working with many payroll software providers to ensure that the legislative changes are enabled as part of the STPR.

Where to begin

Check with your accounting software provider and confirm whether your current software will support the upcoming changes. Communicate these upcoming changes with your HR team to ensure that payroll processing will ensure all employees are being treated fairly and paid correctly.