ALERT: Are you a substantial employer?


Are you a substantial employer and if so, ready for the Single Touch Payroll framework?

As of 1 April 2018 a headcount must be conducted on all employees including full-time, part-time and casuals that worked at least once in the month of March. Single Touch Payroll (STP) is the new reporting framework under which employers will automatically and electronically provide payroll and superannuation information to the Australian Taxation Office at the time it is created (i.e. at the time the employee is paid). STP rules are contained in Div 389 of Schedule 1 to the Taxation Administration Act 1953. Division 389 was inserted by Schedule 23 of the Budget Savings (Omnibus) Act 2016 (the Omnibus Act).

When does it start?

The new law is effective from 1 July 2018 and will affect all employers who employ 20 or more employees (“substantial employers”).  Small employers will be affected the following year, from 1 July 2019 (although may change as legislation has not yet been finalised) The reporting covers payments to employees such as salary and wages, PAYG Withholding and superannuation contributions. The new law means you will report to the ATO in real time.

What’s your headcount?

An entity is a substantial employer at a particular time if, on the most recent 1 April occurring before that time:
  • 20 or more individuals were employees of the entity; or
  • if the entity was a member of a wholly-owned company group on that 1 April — the total number of employees of all of the members of the group was 20 or more.

Minimising non-compliance to protect employees

The purpose of the new legislation is to protect employee entitlements and provide a level playing field for all businesses to minimise non-compliance. Penalties may be imposed on employers who do not receive an approved extension from the ATO and who remain non-compliant after 1 July 2018.

How our team can help

Manage the setup, migration and implementation to Single Touch Payroll (STP) enabled payroll software. We will consult on best practise methods for STP and provide advice as to specific STP requirements, e.g. headcount. We can also assist with a deferral application to the ATO. If you require a consultation on the likely impact this change will bring, please contact Sharon Burke: Sharon Burke E [email protected]

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