XU Magazine - Issue 14

Single Touch Payroll is coming – are your clients ready?

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Single Touch Payroll (STP) is a government initiative to streamline and simplify the way businesses report to the Australian Taxation Office (ATO). Each time an employer pays employees, the business will be required by law to send a report to the ATO detailing the salaries and wages, allowances, deductions and other payments, pay as you go (PAYG) withholding and superannuation…

Your payroll frequency (cycle) does not need to change. You can continue to pay your employees weekly, fortnightly, monthly or other frequencies. You may have different pay cycles for different employees.

Employer checklist to help them get ready

Step 1. Take a headcount of the current employees you have on 1 April, 2018. If they have 20 or more employees on that date, they are considered a ‘substantial employer’ and will be required to report through STP enabled payroll software from 1 July 2018.

What is an employee?

full-time employees part-time employees casual employees who are on your payroll on 1 April and worked any time during March Australian resident employees based overseas any employee absent or on leave (paid or unpaid) seasonal employees (staff who are engaged short term to meet a regular peak workload, e.g. harvest workers).

Do not include:

• any employees who ceased work before 1 April work in March

• independent contractors – go to https://www.ato.gov.au/ Calculators-and-tools/Employee- or-contractor/ to determine if any contractors are considered employees by the ATO

• staff provided by a 3rd party labour hire organisation

• company directors

• Office holders, e.g. President, Vice President, Treasurer, Secretary, etc.

• religious practitioners

If they are part of a company group, the total number of employees employed by all member companies of the wholly-owned group must be included.

Step 2. Review and possibly update their payroll solution.

If they are using a payroll software solution or service provider they will need to confirm with them that they will be STP enabled by the due date. If their current payroll solution is only a desktop product, now is the time to review alternatives and change to a recognised trusted online system such as CloudPayroll, www. cloudpayroll.com.au, as reporting will be streamlined to ATO.

If they are not using any payroll software solution now is the time to choose a proven online solution and get started as soon as possible.

STP Recommendations prior to 1 April 2018

1. Tidy up your employee database. a) Terminate any employees who no longer work for your organisation b) Ensure employees are set up correctly in your payroll software

2. Review Superannuation Guarantee Contribution (SGC) and PAYG processes to ensure the treatment of various types of payments and remunerations are correct. Please note: with CloudPayroll, when our standard pay elements are used, SGC and PAYG are set up correctly.

CloudPayroll is an online based standalone payroll solution who will automatically manage the STP process on their clients’ behalf as part of the standard service. CloudPayroll is suitable for small to medium size businesses from 1 employee up to several hundred. Migration, implementation and training, is all taken care of by our experienced friendly payroll experts. Ongoing, unlimited support is provided by phone or email for no additional fee.

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About the author

Joanna Cruickshank

CloudPayroll is a standalone payroll system suitable for 1 – 200+ employees. Joanna, is passionate in helping people get the best payroll solution for their organisation.