So you have heard the talk around the sector about something called Single Touch Payroll and you are asking what is all about……
The Government announced on 28 December 2014, that it would cut the red tape for employers by simplifying the tax and superannuation reporting obligations through Single Touch Payroll.
Single Touch Payroll will mean that employers will no longer be required to report employee Pay-as-you-go (PAYG) withholding amounts in activity statements or end of year payment summaries ie PAYG payment summaries. Instead employers will electronically report their payroll and super information to the Australian Taxation Office (ATO) when employees are paid, using Standard Business Reporting-enabled software.
In addition, Single Touch Payroll should streamline Tax File Number (TFN) declarations and Super Choice forms by providing a digital channel to simplify the process of bringing on new employees. It could also cut red tape by notifying super funds and government agencies, such as the Department of Human Services, when an employee ceases employment.
The Government is looking to schedule the change over to Single Touch Payroll from July 2016. For employers to meet their obligations under the new Single Touch Payroll system; employers would be required to use, and if necessary acquire, appropriate payroll software. The ATO has noted that the Government has yet to make final decisions on its implementation.
Based on these broad changes being proposed by the Government, employers should be able to streamline the process to report and pay their tax and superannuation obligation through the new system, but there may also be adverse cash flow implications arising from this. Currently, PAYG information and withholding amounts need to be submitted within 5 days of payroll and superannuation payments need to be made within 28 days of the end of the quarter. Under the Single Touch Payroll, the idea is that payments are to be made instantly to the ATO and employees’ super funds at the same time as payroll.
The ATO is currently inviting small business and those who will be effected to provide feedback and comments in relation to the Single Touch Payroll Discussion Paper which is available on their website:
https://www.ato.gov.au/General/Consultation/What-we-are-consulting-about/Papers-for-comment/Single-Touch-Payroll-discussion-paper/
