Comparing the Current Payroll Law to the New Payroll Law
Current Law until 30 June 2018
Employers take certain amounts from their employees' pay when they pay them for different reasons. The employer is responsible for notifying the Commissioner of Taxation as to the amount they withheld at a later date. The employer then remits these reported withholdings to the Commissioner or Taxation and gives an annual report to the ATO and every employee.
Employers use SuperStream to report any of their employees' superannuation contributions on the day they make the contributions, but the employer isn't required to report this to the ATO. An employer does have to lodge superannuation guarantee statements each quarter to the ATO.
New Law 1 July 2018
Any employer that has 20 or more employees is required to report with Single Touch Payroll-enabled software to the Commissioner of Taxation either before or on the day the employer withholds certain things from their employees' pay. The ATO will require employers to report their employees' wages, salaries, deductions, allowances, and ordinary time earnings or superannuation liability information.
Any employers who use Single Touch Payroll to report all of the required information are not required to follow several current reporting obligations, including providing the ATO with specific payment summaries or the payment summary annual report (PSAR). However, employers will have to give the ATO a finalisation declaration.
The Reporting Process
Employers have different options for reporting with Single Touch Payroll software.
Use Your Current Payroll
- Get in touch with your current payroll software provider and ask for a timeline when your software will be ready for Single Touch Payroll. You may be able to use an end-to-end process where you send your files directly to the ATO. You can also report through your payroll software and have a third-party send the file. Finally, you can get Single Touch Payroll reporting only, which sends any files to the ATO through a sending service provider.
Pick a New Payroll Solution
- If you're an employer that currently uses paper to report to the ATO, has an existing payroll software that doesn't support Single Touch Payroll, or if you want software that suits your business needs better, you may have to pick a new payroll solution.
Bring in a Third Party
- If this is overwhelming, you can bring in a third party to help you. The professionals at Tax Accounts Parramatta can report on your business's behalf. However, it is your obligation as a business owner to make sure that your third-party reports through Single Touch Payroll software.
The move to Single Touch Payroll is coming quickly. You want to have someone who is knowledgeable in your corner to ensure that you're ready. The agents at EtaxPlus can help your business transition to this new software and streamline your payroll process. Contact us today to set up an appointment.