Today (1 April 2018) is the first milestone date for Single Touch Payroll.
Don’t worry if you haven’t done anything about STP up until now as a very large proportion of accountants and business owners have openly said they haven’t either.
Let’s get you on track and ticking off your first task which is getting your employees counted.
THE ACTUAL HEADCOUNT
You will need to do a headcount of your employees as of today (1 April 2018) to see if you have to start reporting to the ATO via Single Touch Payroll (STP) on 1 July 2018.
It’s a bit like a census in that it can be done after today. Count the number of employees who were on your payroll as at 1 April 2018 to see if you are IN or if you are OUT of the STP system. You should be able to print a report from your payroll software to make this task a little easier.
WHO GETS INCLUDED IN THE HEADCOUNT?
The headcount as the name suggests, is based on an actual headcount ie. it doesn’t matter if an employee is full-time, part-time or casual – they are all counted as one!
Tally up the total of the following people on your payroll as at 1 April:
- full-time employees
- part-time employees
- casual employees and seasonal workers who worked any time during March. There are exemptions to counting seasonal workers who were employed for a short-time only.
- employees based overseas
- any employee absent or on leave (paid or unpaid).
WHO GETS EXCLUDED IN THE HEADCOUNT?
When tallying up your employees, you do not have to include the following people:
- 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
WHAT TO DO ONCE YOU HAVE DONE YOUR HEADCOUNT?
Record your headcount and file with any relevant reports somewhere safe.
This headcount does not need to be provided to the ATO and is purely for your use to determine if you need to start reporting to the ATO via STP from 1 July 2018.
IF YOU HAVE LESS THAN 20 EMPLOYEES
You will not need to start reporting to the ATO via STP by 1 July 2018, however you may voluntarily do so.
If that is the case, follow the steps below.
IF YOU HAVE 20 OR MORE EMPLOYEES
Now it’s time to speak with your Digital Service Provider (DSP) to see if the accounting and payroll software you are currently using will be STP enabled and ready by 1 July 2018.
If it is not going to be ready, your DSP will most likely have already applied to the ATO for a deferred start date which is going to buy you some time. Alternatively, if you are keen to start reporting to the ATO via STP, you can change software to another STP compliant one. Please discuss this with your accountant prior to rushing into this decision though.
If your accounting and payroll software will be ready, but you don’t think you will be, you or your tax agent can apply to the ATO for a deferred start date also.
If your accounting and payroll software will be ready and you plan on being ready too – well done! Just bear in mind that there may be a little bit of work to do to ensure your payroll processes are working optimally and will allow for an easy transition to STP. It would also be a great idea to have a chat with your accountant or bookkeeper to see if they recommend any improvements to your payroll processing and bookkeeping procedures.
It may not be as easy as “flicking a switch” and I will talk about some other issues requiring consideration in one of my future blogs.
SOME OTHER INTERESTING STP FACTS THAT YOU MAY FIND USEFUL
If you have 20 or more employees as at 1 April and then you have less than 20 employees on 1 July, you will still need to report via STP from 1 July 2018 and every year after. The only way you can be removed from the STP system is if you apply to the ATO for an exemption.
If you have less than 20 employees as at 1 April but on 1 July you have 20 or more employees, you will still not be required to report via STP on 1 July 2018.
Legislation is currently before Parliament to extend STP to all employers from 1 July 2019.
Even though directors, office holders and religious practitioners are excluded from your headcount, when you start reporting through STP you will need to report payment information for these people.
KEEN FOR MORE STP INFORMATION?
Well that covers the basics of what you need to do in relation to the actual headcount and will tick off your first milestone.
If you enjoyed this blog, please feel free to share and also please continue regularly check my website for more STP blogs. Alternatively, follow me on social media (Amanda Gascoigne Coaching and Consulting on Facebook and Amanda Gascoigne on Linkedin, Twitter and Instagram). I will also be running some online STP workshops and have some other one on one STP offerings, the details of which will be on my website in the next week.