SINGLE TOUCH PAYROLL Are you ready for STP? Presence of IT
CONTENTS Introduction What will STP achieve? What s changing? What s staying the same? Checklist The 4 steps to STP ready Prepare & Apply Submit & Communicate 2 3 4 4 5 6 7 8 1
INTRODUCTION Single Touch Payroll is a government initiative to streamline your payroll reporting to the ATO. All employers with more than 20 employees need to be ready for STP on July 1st, 2018 unless you or your software provider have been granted an deferral. STP requires employers to submit salary, superannuation and tax details to the ATO each time they pay an employee. It also provides a mechanism for the ATO to send messages back to the employer, about the information submitted. STP is part of the Standard Business Reporting (SBR) framework to digitise communication between you and the government. The focus of STP is reporting, with the aim of providing greater transparency between you, the ATO and your employees. You don t need change your payroll frequency and the payment of your PAYG, and Super contributions don t need change either. You still need to produce payslips for your employees each pay. From next year you won t need to give your employees a Payment Summary, as they will be able to get the information through mygov. 2
WHAT WILL STP ACHIEVE? Employer Streamline the process of reporting to the ATO ATO will be able to pre-fill the BAS (W1 and W2) for employers Removes the EOFY requirements to produce payment summaries to individuals or a payment summary annual report Employee Provides visibility via mygov of their year to date salary and wage income, PAYG withholding and super guarantee contribution amounts as they accumulate New employees will have the option of completing TFN declarations and Super Choice forms online (initially via mygov) (Not available immediately) Simplify their tax return if they use mytax ATO Greater transparency More data and in a more timely manner Earlier awareness of whether employers are meeting their PAYG withholding and super obligations Simplifies how employers collect tax file declaration and super choice information when onboarding new employees (not available immediately) Single Touch Payroll...will allow employers to be able to meet their reporting obligations to us using their own payroll or accounting software. 3 John Shepherd Assistant Commissioner of the ATO
WHAT S CHANGING You will be reporting payroll data to the ATO every pay cycle (weekly, fortnightly, monthly, off-cycle) Information will be submitted electronically using an ATO XML format and must be done through the SBR2 platform. Your payroll software will need to be STP enabled and/or you will need to work with an STP provider. Employers using STP will no longer have to provide employees with payment summaries at year end. You will no longer be able to submit Payment Summary information through the ECI or the ATO Business Portal. Employees will be able to access their Year to date information through the mygov portal STP data will be used by the ATO to pre fill information on your BAS. WHAT S STAYING THE SAME STP does not change an employer s obligations under the Fair Work Act 2009, the Fair Work Regulations 2009 ( Fair Work legislation ) and other workplace legislation, to provide information to an employee on a pay slip Payment dates of Superannuation contributions 4
CHECKLIST Contact your providers Connect with the ATO Review your business process Apply for more time if you need it Communicate with your staff Find out how your payroll provider will be offering STP functionality Check if they have a deferred start date Find out about the process to transition to STP Visit ato.gov.au/stp and subscribe to any updates Follow the ATO on Facebook, Twitter and LinkedIn. Make sure the ATO have the correct contact details for your business Make sure the right people in your business know about STP. Check if you are paying your employees correctly Check if you are calculating your employees super entitlements correctly Check if you are addressing overpayments correctly. Check if your employee information is accurate and up to date If your software will be ready but you won t, you need to apply to the ATO for a deferred start date. Visit ato.gov.au/stp and find out about our deferral process. If your software has a deferred start date, and you need more time, you need to apply for your own deferral. Make sure you follow the ATO guidelines and provide all the evidence required. Once you start your STP reporting, let your employees know so they can start to access mygov. Remind them that you won t be providing Payment Summaries going forward. 5
THE 4 STEPS TO STP READY To be STP ready you only need to follow our 4 simple steps - and Presence of IT can help you each step of the way: Prepare To get ready you need to look at your payroll software and your payroll processes. Apply Once you know what changes need to be made to your payroll software make sure you plan for it and allow enough time to be ready. Submit Once your software is ready you can start sending the information to the ATO. This will become part of your normal payroll process just like giving employees a payslip and sending their money to the bank. Communicate It s important to let the people in your organisation know about the changes: Speak to your finance team and let them know some of the BAS information will be prefilled based on the details in STP Talk to your employees and let them know that you won t be giving them a Payment Summary next year AND that they can get that information from mygov AND that they should probably set up a mygov account 6
PREPARE Preparation is key as this change will impact your existing payroll process. What are your existing payroll and end of year processes? How do they need to change to support STP? Have you spoken with all the stakeholders payroll, IT and Finance to ensure they are up to speed with the changes? How clean is your data? STP will force data validation into your process. Do you have mechanisms in place to keep your data clean? What are your pain points for reconciliation? How can these be resolved before STP arrives? We understand Payroll People and Processes This change is about more than a technology update. It involves changing processes and increasing the speed at which payroll needs to respond. By helping you understand where you are, we can help you get to where you need to be. APPLY Applying the changes to your system for STP is only part of the process. Updates will be provided by your software vendor but what about your local customisations? These need to be reviewed in light of the STP changes. Can you connect to the ATO to be able to test the STP files you are producing? End to end testing needs to be considered Have you thought about testing the various scenarios identified in the ATO Business Scenario Guide? What training do you need to provide to your payroll team so they are ready for STP? Functional and Technical support through the process Resources We have the functional and technical resources that assist you through the process of applying and testing these changes and ensuring you are ready for Single Touch Payroll. 7
SUBMIT Submitting the STP file to the ATO isn t the final step in the process. There is no direct connection between you and the ATO. Your software vendor may provide a solution OR you will need to engage a third party. Single Touch Payroll provides a 2-way communication channel between the ATO and your organisation. How will you manage sending and receiving messages from the ATO? Sending the STP file will mean it will be validated by the ATO. It s better for you to check the file before it goes to the ATO either in your software or prior to submitting it to the ATO. Solutions to be able to submit your STP details Portal or API solutions Depending on your requirements and your software vendors solution, we can provide options to get your information to the ATO and receive messages back. COMMUNICATE STP will impact the payroll teams but communicating the changes to employees will be key to any successful implementation. Employees need to know that they won t be getting Payment Summaries from next year. mygov will now be a crucial resource for employees. Do they know what they need to do? How do you ensure that you ve communicated to everyone and assess their level of engagement? Pre-packaged project communications only Digital Content Communication campaigns templates aligned to your implementation phases that are 80% ready to go. 8
LET S GET YOU READY FOR STP Get in touch with one of our STP specialists and we ll prepare a personalised proposal to ensure you re ready for STP. Contact us 1300 665 503 www.presenceofit.com.au/single-touch-payroll stp@presenceofit.com.au About Presence of IT Presence of IT is a leading consultancy and provider of the world s foremost Human Capital Management and Workforce Management solutions. We provide thought leadership, strategy, process improvement, software selection advice, implementation, hosting and operational support services to many of the world s largest private and public sector organisations. Our strength is in the excellence of our people and our focus is on our clients. This focus has seen us evolve into a global organisation to better support our customers in their respective markets, the world over.