Single Touch Payroll. Presented by Damon Guest \ CA Management Services

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1 Single Touch Payroll Presented by Damon Guest \ CA Management Services support@caman.com.au

2 What is Single Touch Payroll 2 Single Touch Payroll is a government initiative to streamline business reporting obligations for the ATO Reporting of payments such as salaries and wages, pay as you go (PAYG) withholding and super information. It simply means that every time you run your payroll, you will have to send an amount of data equivalent to your payment summaries to the ATO

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5 Important Dates 5 April 2018 July July Conduct a headcount to determine if you have 20 or more employees. Single Touch Payroll reporting will be mandatory for employers with 20 or more employees. Employers with 19 or less employees will be required to report through Single Touch Payroll, subject to legislation being passed. ATO will continue to develop and improve the STP Process

6 Who do I Count? 6 full-time employees part-time employees casual employees who are on your payroll on 1 April and worked any time during March 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, for example, harvest workers)

7 Employees to Exclude 7 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

8 Payroll Events 8 Payroll Event (PAYEVNT) services provide business or their registered intermediary the ability to report payroll information to the ATO including out of cycle payruns. The ATO uses AUSKEY for authentication and a BMS-ID to enable them to receive and reconcile data. YTD totals will be stored per ABN, Branch ID and BMS ID. A Branch ID is provided where Organisations sub-divide activities to deal with tax obligations, otherwise set to 001.

9 Payroll Event Data 9 Payroll Event Fields ATO Labels Registered Agent Declarer Identifier Payer Declarer Identifier Report Financial Year Start Date ETP Code Registered Agent Declaration Date Payer Declaration Date Report Financial Year End Date Payee ETP Tax Free Component Registered Agent Declaration Indicator Payer Declaration Acceptance Indicator Final Event Indicator Payee ETP Taxable Component Registered Agent ABN Payer Total PAYGW Amount Period start date Payee Total Voluntary Agreement PAYGW Registered Agent Number Payer Total Gross Payments Period end date Amount Registered Agent Address Payee Allowance Amount Reportable Employer Super Contributions Payee Gross Payments Voluntary Agreement Registered Agent Business Hours Phone Number Allowance Type OTE Amount Payee Lump Sum Payment B Registered Agent Contact Name Other Allowance Type Super Guarantee Amount Payee Lump Sum Payment D Payer Address Deduction Type Payee Total Labour Hire PAYGW Amount Payee Lump Sum Payment E Payer Business Hours Phone Number Payee Deduction Amount Payee Gross Payments Labour Hire Payee Lump Sum Payment A Payer Australian Business Number Payee Payroll ID Payee RFB Exempt Amount Payee Lump Sum Payment A Type Payer Withholding Payer Number Payee TFN Payee Total FEI PAYGW Amount Payee Gross Payments Working Holiday Maker Payer Branch Code Previous Payee Payroll ID Payee Foreign Employment Income Foreign Tax Paid Payee Total Working Holiday maker PAYGW Amt Payer Organisation Name Payee Family Name Payee Gross Payments Foreign Employment Payee Zone Rebate Claimed Payer Contact Name Payee First Name Payee Total INB PAYGW Amount Payee Overseas Forces Rebate Claimed BMS Identifier Payee Other Name Payee Gross Payments Individual Payee Special Rebate Claimed Payer Suburb/Town Payee Date of Birth Payee Exempt Foreign Income Amount Payee Tax Offset Variation Amount Payer State/Territory Payee Address Line 1 Payee CDEP Payment Amount Payee Higher Education Loan Program (HELP) Payer Postcode Payee Address Line 2 Payee FEI JPDA Foreign Tax Paid Indicator Payer Country Code Payee Suburb/Town Payee Total FEI JPDA PAYGW Amount Payee Trade Support Loan Indicator Payer Address Line 1 Payee State/Territory Payee Gross Payments JPDA Foreign Payee Student Loan Indicator Payer Address Line 2 Payee Post Code Employment Payee Employment Type Code Full File Replacement Indicator Payee Country Code Payee Total Other Specified Payments PAYGW Payee Residency Status Replaced payroll transaction ID Contractor ABN Amount Payee Tax Free Threshold Claimed Pay/Update Date Payee Commencement Date Payee Gross Payments Other Specified Payments Payee Senior Australian Tax Offset Claimed Submission ID Payee Cessation Date Payee RFB Taxable Amount Payee Declarer Identifier Payee Record Count Payee Address Payee Total ETP PAYGW Amount Payee Declaration Date Run Date/Time Stamp Payee Phone Number Payee ETP Payment Date Payee Declaration Acceptance Indicator

10 Superannuation 10 Single Touch Payroll requires an employer to report to the ATO: -Superannuation Guarantee liability for an employee and/or Ordinary Time Earnings (OTE) at payevent The ATO will receive superannuation payment information from the super funds This information will be used to support improved engagement by the ATO with employers, and to support improved transparency of Superannuation Guarantee information for members

11 Exemptions 11 The ATO may grant you an exemption from Single Touch Payroll reporting if: you are located in a rural area with no reliable internet connection If you are granted an exemption you will not need to start Single Touch Payroll for the year(s) you are covered by the exemption. You must continue to comply with your existing PAYG withholding obligations including: reporting and paying your PAYG withholding liability giving payment summaries to your employees giving a payment summary annual report to the ATO

12 Deferrals 12

13 Deferrals cont d 13

14 Penalties 14 During the first 12 months you report through Single Touch Payroll you will be exempt from an administrative penalty for failing to report on time. The caveat being, unless the ATO has first given you written notice advising that a failure to report on time in the future may attract a penalty.

15 STP Submission how it works 15

16 Authentication 16 Authorisations and declarations There are different requirements in regards to the making of the declaration and subsequent submission to the ATO within the pay event, depending on whether it has been created by the employer (or an authorised employee), or by a Registered Agent. Authentication and the Final Hop The successful authentication of payroll reports is dependent on the final hop. The final hop is the network segment between the last AUSkey Owner entity and the ATO. The AUSkey of the entity directly connected to the ATO must be used to transmit Pay events and Update events to the ATO. The entity sending the message must be authorised to send that message to the ATO by the employer or their registered Tax or BAS Agent

17 WageEasy Example 1 17

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19 19 Click here for more detail on which allowances need to be reported on a Payment Summary across the following 6 categories: Meal Laundry Travel Car Transport Employment (aka other)

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21 21 STP reportable deductions fall under one of 2 categories Workplace Giving Fees (Union)

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23 Once STP Setup is complete, selecting the STP icon changes automatically to Single Touch Payroll Reporting (PayEvent reporting) 23

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26 Attache - Example Setup & Submission 2 26

27 Example 3 Spreadsheet 27 If you are looking for an alternate solution we are able to submit your payroll manually via spreadsheet using a third party.

28 Payevt processed by the ATO 28 Errors if an employee errors, no need to reprocess this pay, just fix the error and wait until next pay as their data will then be correct and up-to-date The ATO has an SLA that currently states, once a receipt has been received, the payevt lodgement will be processed within 72 hours In circumstances of disaster recovery the ATO is working to ensure all data is captured and retained to ensure there is no requirement for resubmission. There is also no time limit on uploading data in cases where there is a slow internet connection or the file is very large.

29 Business Portal STP Reporting 29

30 Employer STP Reporting Screen 30

31 Employee Experience 31

32 Checklist 32

33 The Practical 33 We all know Group Certificates / Payment Summaries are Annual STP is essentially the same info but every pay Each new STP replaces the last one

34 Tax Returns 34 We use our Group Certificate / Payment Summaries Take to your Accountant Lodge Tax return Online Prepare Manual Tax Return and send to ATO With STP there will be NO Group certificates / Payment Summaries All the data is available on MYGov To do your Tax return Go to your Tax Accountant who can get all the data from their portal Go to MyGov and Lodge Tax return online Request information from ATO and do a manual Tax return

35 The ATO 35 BAS Returns these will be prefilled based on STP returns Superannuation Coy s will update ATO on when they are paid No more late payments of Super More penalties Cash Flow Original law had companies paying PAYG as same time as lodging STP No doubt this will continue to be a goal for the ATO Deferrals it will not be like Super changes - more like GST will happen eg help and support for 12 months

36 The Challenge 36 It is over to your payroll provider to do the work Your Part When you first register Getting all of the cloud connectors / registration sorted Auskey etc You can start before 1 st July Getting names and info correct and thru the ATO data checks Superannuation updates has cleaned up payroll data a lot

37 Payroll Systems 37 Most Vendors are saying they still in development phase Many are saying they are waiting on ATO specs These were actually finalised in Dec 17. How much is it going to cost? Changeover Ongoing All Payroll Systems will require an update or upgrade to gain access to STP Functionality

38 Small Payroll Systems 38 Xero They say they will be compliant but no info available yet Not Listed on ABSIA as working on STP MYOB Users must move to Account Right (eg Premier and v19 Myob Sites are not going to be updated) ATO Deferral - Clients who are unable to move to an STP enabled version of AccountRight, because they are currently using multi-currency, negative inventory, multi location inventory, M-Powered Payment or ODBC and those using AccountEdge, have been granted an STP reporting deferral until 31 May Quickbooks : Reckon software with payroll functionality including Reckon One, Accounts Hosted, Reckon Accounts 2018 and Payroll Premier 2018/2019 will be STP-enabled and ATO compliant by 1 July Note versions

39 Large Payroll Systems 39 Attache Fully Compliant - Will require an upgrade to BI and an install of their Cloud Service - We are installing NOW with aim to complete before end of May Definitiv scheduled for a STP release late April - May. MYOB Exo / Advanced / Greentree May 18 Testing and June 18 Release Sage WageEasy Two updates, standard update release in April and another in June

40 Payroll Systems 40 What to do if your payroll system is not going to be compliant 1. Chase the provider to see if they will be getting a deferral 2. Contact ATO to get your own deferral 3. Change Systems or outsource 4. Utilise a 3 rd party STP addon eg spreadsheets upload from payroll reports

41 Supporting Links 41 STP Authoristations and Declarations Scenarios ATO - Business Implementation Guide ATO Deferral Request Form Allowance and Deduction setup

42 CA Management Services Contact Details 42 Address: 88 Burswood Road, Burswood WA 6100 Phone: Website: Questions?