Single Touch Payroll Reporting (STPR)

From 1 July 2018, all 'substantial employers' [employers with 20 or more employees] in Australia are required to use the Single Touch Payroll (STP) system for reporting tax and superannuation. The Australian government is implementing Single Touch Payroll Reporting (STPR) from 1 July 2017, and it becomes mandatory for all such employers.

STP is an Australian government initiative that enables employers to report staff salary and wages (including ordinary time earnings) and PAYG withholding amounts to the ATO at the same time they pay their employees.

Superannuation contribution information is reported to the ATO when payments are made by the employer to the fund.

Single Touch Payroll Reporting (STPR) system is designed to help the Commissioner of Taxation determine whether employers are compliant with their PAYG and superannuation obligations in a timely fashion. This will enable the Commissioner to react promptly to any breaches and increase the amount of compliance activity, especially for the superannuation guarantee surcharge.

Employers will have option to pay their PAYG withholding more regularly. For e.g. at the same time they pay their staff.

Following are the main changes regarding the STPR:

• The reporting of gross wages and PAYG withholding at an employee level to the ATO will need to take place on or before the date the PAYG withholding amount is due. Currently this reporting occurs at an employer level when completing the Activity Statement.

• Salary, wages, ordinary time earnings and superannuation contributions are to be reported at an employee level on or before the payment is made to the super fund.

• Payment summaries will be phased out for employers using the STPR system to report their fringe benefits tax (FBT) and superannuation contributions by 14 July each year.

• Employees will have access to an ATO portal containing real time payroll information and annual reports.

• Employees will have the option to complete superannuation choice and tax file number declarations online. But, employers are still required to provide paper forms to their employees.

• Providing employees with visibility of their total year to date income, PAYG withholding amounts and super guarantee contribution amounts as they accumulate

• To simplify business reporting for employers by leveraging the natural process of paying their employees, to meet their PAYG withholding reporting obligation at the same time

• Once the system has become fully automated, the employers' compliance costs will be reduced, as the reporting requirements and other reporting measures are reduced, such as the reporting of PAYG withholding tax via activity statements.

Benefits of STP

• Providing employees with visibility of their total year to date income, PAYG withholding amounts and super guarantee contribution amounts as they accumulate

• To simplify business reporting for employers by leveraging the natural process of paying their employees, to meet their PAYG withholding reporting obligation at the same time

• Once the system has become fully automated, the employers' compliance costs will be reduced, as the reporting requirements and other reporting measures are reduced, such as the reporting of PAYG withholding tax via activity statements

Information source : 
http://www.mondaq.com
https://www.ato.gov.au/