In the 2015-16 MYEFO statement, released on 15 December 2015 by the Treasurer, the Hon Scott Morrison MP, and the Minister for Finance, Senator the Hon Mathias Cormann, the government announced that it will simplify the reporting by employers of their PAYG withholding obligations and superannuation contributions by progressively implementing Single Touch Payroll (STP).
Under STP, employers will automatically report individual employee payroll information to the ATO using their business management software. STP will also introduce reporting of superannuation contributions information to the ATO when payments are made to super funds. Employers will have the option to pay their PAYG withholding at the same time they pay their staff.
The government will introduce streamlined processes for individuals commencing employment. Individuals will have the option of completing their Tax File Number declaration and Superannuation Standard Choice forms using myGov or through their employer’s business management software.
This measure will be phased in as follows:
- From January 2017, there will be a voluntary pilot of STP. The pilot will focus on, but is not limited to, targeted Small and Medium Enterprises
- From July 2017, all businesses may commence STP reporting, with the option to make voluntary payments. In addition, the ATO will commence transitioning employers with 20 or more employees to STP, and
- From 1 July 2018, employers with 20 or more employees will be required to use STP enabled software for reporting to the ATO.
To assist Small Business that wish to take advantage of the benefits of STP, the government will provide businesses with a turnover of less than $2 million with a $100 non-refundable tax offset for expenditure on Standard Business Reporting enabled software.
This offset will apply from 1 July 2017, and will be available for software purchases or subscriptions made in the 2017-18 Financial Year only.
If you would like to discuss these changes and how they effect you further please contact us below: