If you haven’t, and your business employs more than 20 employees, this is a term that you will have to understand and be prepared for before 1st July 2018.

The Australian Taxation Office (ATO) has announced that from 1 July 2018, any businesses that employs more than 20 employees (headcount should be done as at 1st April 2018) will need to “report through a payroll solution” (i.e. payroll software) that enables “Single Touch Payroll” from 1 July 2018.

This “report”, in essence will provide the ATO all the information on salaries or wages, PAYG withholding Tax and Superannuation Contribution when the payroll is processed.

Long story short, from 1 July 2018, if you employ more than 20 employees, you will need to inform the ATO how much you pay your employees, the PAYG Withholding Tax on the pay and the superannuation that goes with the pay WHEN you process your pay. 

If this all goes according to plan, I believe the ATO will either want to match this information with the superannuation contributions received by the respective superannuation funds, or pass this information to the superannuation funds and ask the superannuation funds to “report” on any late payments of superannuation contributions, therefore creating an audit opportunity for Superannuation guarantee charge *.

It goes without saying that they will crosscheck the PAYG Withholding tax against the monthly/quarterly Business Activity Statement (BAS) to look for any shortfalls.

If your current payroll software does not support Single Touch Payroll, I would have expected that it will before 1st July 2018.  However, it might mean more updates and more costs. 

The positives – if you have 19 or less employees on 1 April 2018, then you don’t need to start reporting through Single Touch Payroll from 1 July 2018.
Good luck!

  • For those of you who might not be aware, if you don’t pay your superannuation obligation for your employee into the correct fund by the due date (28 days after the quarter end), even if you are one day late, then you are obligated to prepare and lodge a Superannuation Guarantee Charge (SGC) Statement and it would mean:
    1. Interest on the shortfall;
    2. Administration free of $20 per employee, per quarter
    3. Potential penalty for failure to lodge the SGC on time (1 month after the due date of the superannuation contribution)
    4. More importantly, the SGC is NOT tax deductible.