Business tax and superannuation reporting obligations will soon become more straightforward, thanks to the introduction of the Australian Taxation Office’s (ATO) Single Touch Payroll (STP) initiative.

From July 1, 2018, employers will be able to automatically report salary or wages, pay as you go withholding (PAYGW) and super contributions directly to the ATO using STP-enabled software, as part of their normal payroll process.

The government initiative aims to simplify reporting obligations by completion of tax and superannuation forms online.

LDB principal Daniel Dubois said that STP would make it easier for business.

“It should certainly facilitate the process and make it simpler to administer,” he said.

“That’s the point behind the STP system – to make things easier for taxpayers, companies and businesses along with the ATO.

“The amount of time taken to complete superannuation and payroll has been reduced by taking on STP.”

The new reporting system will also benefit employees, as they will be able to see their year-to-date pay, tax withheld and superannuation entitlements throughout the year.

Those who start a new job may also be able to electronically complete a pre-filled tax file number declaration and superannuation standard choice form using the ATO’s online services.

Who’s affected?

Employers must do a head count on April 1, 2018, and if they have more than 20 staff on that date, they will be required by law to report through a payroll system that enables STP from July 1, 2018.

Businesses with fewer than 20 employees will not need to start reporting through STP, but may choose to do so.

What’s required?

For most employers, STP will become part of their existing payroll management system.

Businesses with a turnover of less than $2 million are entitled to a $100 non-refundable tax offset for software purchased in the 2017-18 financial year.

Each year, employers will have to finalise their STP reporting and notify the ATO by July 14.

They’ll no longer be required to provide employees with a payment summary at the end of the financial year – instead, the ATO will make the information available to employees and their tax agents online, and will pre-fill each employee’s tax return.

We’re here to help

As your tax agent, we can support your business through the transition to STP reporting.

“For businesses that need assistance, we can help them get it organised and once set up, it will take care of itself,” Mr Dubois said.

To find out how we can assist you, please get in touch by calling (03) 9875 2900 or send us details via the contact form below.