Chief Executive, Definitiv
| by Roy Mellon - Chief Executive, Definitiv
You counted the number of staff in your organisation, and you checked to see whether your software provider was ready for 1st July, but what else do you need to do to get ready for Single Touch Payroll (STP)?
As the Chief Executive of Definitiv, a cloud-based Payroll and HR platform, I am regularly asked by clients what they need to do on their end to get prepared for the introduction of STP.
To help you prepare for the newly introduced reporting requirements, I have laid out five simple steps to follow to make your start to STP reporting a breeze.
This may sound self-evident but not having the correct employee information is likely to cause the greatest number of issues when reporting.
The most critical attribute the ATO needs to link pay information back to an employee is a full and valid TFN. If the TFN supplied is incorrect, then the ATO will use the following details to identify your employees;
A full review of employee details before STP comes into effect is unlikely to be feasible unless you have a small team. Therefore, one simple task could be to make sure each staff member has a complete TFN assigned to their Master Record.
This can be assessed fairly easily by running a report through your payroll software. For example, through Definitiv, you can review TFN and the above information, all in the one Employee Listing Report.
This step is straightforward and as the ATO’s requirements haven’t changed with the introduction of STP, your pay items should already be set up correctly. However, if you have added new Pay Items recently, make sure they have been accurately categorised for ATO purposes.
It is essential your employees sign up and create their own myGov account. myGov is an Australian Government initiative and allows individuals to access their online government services, such as the ATO.
As soon as your company starts to report through STP, employees will need a myGov account to access their pay and tax information.
To make things simple and straightforward, this step can be combined with step 3. As soon as STP comes into effect, Payment Summaries will no longer be a legal requirement and employers will not need to supply them to staff.
This is the main reason why your staff need to have a myGov account. With STP, as you are reporting directly to the ATO, once you have finalised the payroll at end of financial year, employees will have direct access to their income tax information through their myGov account.
If you still want to offer your staff a Payment Summary alternative, speak directly with your payroll software provider to find out if they are offering an alternative solution once Payment Summaries are eliminated.
To help with the transition, Definitiv will be making “Annual Statements” available in place of Payment or ETP Summaries. The Annual Statements will be made accessible to employees through their Definitiv account once the payroll has been finalised with the ATO at the end of the financial year.
Depending on when your payroll software provider is STP ready, try and start reporting as soon as you can. Definitiv was ready for STP reporting by mid-May 2018 and we encouraged all our customers to get onboard early.
If you can start reporting now, this will provide you and your team the perfect opportunity to iron out any bumps sooner, rather than later.
By getting a jumpstart on STP reporting, it will enable you to pick up any concerns addressed in steps 1 and 2.
If you have any questions regarding Single Touch Payroll, please email email@example.com.
This article is prepared by Definitiv.
Keep up-to-date with the latest industry updates in share registry, employee plans and corporate governance.SUBSCRIBE