If you’re someone who runs a business, you may have heard of the term “single touch payroll” in recent times. For those who are unaware, single touch payroll is a new regulation by the Australian Taxation Office to change the way employers report their employee’s tax and superannuation on a monthly basis instead of the old system of reporting it annually. These reports need to be sent in annually, and have to follow a very specific format.
Due to the strict formatting regulations, today we present to you an overview of single touch payroll – what you need to know about it and how you can implement it in your business without any major hiccups. Grab a cuppa and read on to find out more!
First Of All, What Do I Need To Know?
One of the biggest changes when it comes to implementing single touch payroll is that instead of small businesses finalising payroll records and submitting them at the end of the financial year, businesses will instead have to update the ATO on a pay-to-pay basis. This means that reports are sent in after every monthly payroll, and annual payment summaries will be a thing of the past. Do keep in mind that you will still need to notify the ATO when you’ve made the last payment for the financial year to your employees.
Furthermore, with the single touch payroll in place, you needn’t provide your employees with payment summaries as the single touch payroll reports will be the sole record of taxes collected, salaries paid and employee superannuation. Employees have access to all this information my logging into their myGov accounts, thus negating the need for employee payment summaries.
What Do I Need To Do?
Now that you have a basic understanding of single touch payroll, you may be wondering exactly how you will be going about putting it into practice, along with what you need to do.
Firstly, take note that with single touch payroll, everything is conducted and submitted online. The most important bit of this process is ensuring that your payroll activities are organised in a Standard Business Reporting format, and only that. If you are currently using a different format of reporting, it is advised that you utilise new software or find a service provider that can assist you in changing your reporting format to SBR. Software providers will also be able to tell you more about how they offer single touch payroll reporting, so do not hesitate to give them a call or drop them an email.
When Is The Deadline?
If you are just a small business with under 20 employees at this current moment, there is no specific or confirmed deadline as to when you need to fully switch over to single touch payroll. It is an estimate that by July 2019, single touch payroll will be fully in place even for small businesses, so it is always advisable that small businesses try to switch over sooner rather than later to avoid the need to rush in the future.
For larger businesses of 20 employees or more, you will need to switch over to single touch payroll by July 2018. Any business that may need a little more time than that is advised to apply for a deferral via the ATO website. Once again, do not hesitate to contact your tax professional or software provider if you need assistance in switching to single touch payroll.
What Are My Options?
When it comes to your options regarding single touch payroll, you have a few. Firstly, you can use your current payroll software as long as it can provide ATO compliant reports. If your current software is unable to do so, we suggest sourcing for a different one or calling them up to see if they can assist you in any means possible.
For those who are still using desktop or spreadsheets for payroll, you will have to upload them and send them in digitally to the ATO. Again, we cannot stress enough how you will have to ensure you are compliant with the standard business reporting format in order to avoid any hiccups or unnecessary errors.
Last but not least, as a tiny bit of advice, we highly recommend that those who are currently not using the services of a business bookkeeper or accountant maybe look into doing so, as they will be able to help you with this entire process, even if you just use their services for the first few months to get you into the flow of things.
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We hope that this article has provided you with some useful information about single touch payroll and how your business can go about switching over to this format of reporting with ease.