Below are some frequently asked questions regarding Single Touch Payroll which have been sourced from the ATO, software vendors and Deloitte Private. Outside of the Deloitte Private FAQs, we are only replicating the frequently asked questions and answers from third parties for your benefit and have not been verified for their accuracy.
DELOITTE PRIVATE FAQs
Q: Are Deloitte Private engaged to report STP to the ATO on our behalf?
A: If Deloitte Private are currently performing payroll tasks under your current engagement then they are engaged for STP as well (please refer to your current engagement letter if you are unsure).
KEYPAY (INTUIT PAYROLL) FAQs
Q: Will I still need to submit a BAS?
A: Yes – you’ll still need to submit a BAS, but the W1 and W2 values will be pre-filled.
Q: Will I be able to adjust the pre-filled values on my BAS?
Q: Will I still need to submit an annual payment summary report?
A: If you use Single Touch Payroll reporting, you may not need to submit a payment summary report.
Q: Will I still need to generate payment summaries for my employees?
A: If you use STP reporting, you may not need to submit a payment summary report. The ATO will make that information available to employees through myGov.
Q: Can I make PAYG or super payments through Single Touch Payroll?
A: No, Single Touch Payroll is a reporting solution only. You will still need to make PAYG and super payments separately. For example, if you use KeyPay through Quickbooks/Intuit, PAYG can be processed through an ABA file and super payments can be automated with ClickSuper.
Q: Can I use single touch payroll even if I’m not required to?
A: Yes – if you’re an employer that has 19 employees or under and you want to use Single Touch Payroll, then you should be able to do so.
Q: Can a bureau or payroll provider or registered BAS agent submit Single Touch Payroll data on behalf of a client?
A: Yes, bureau payroll providers and BAS agents will be able to lodge STP data on behalf of clients so long as they are using a solution that is updated for Single Touch Payroll reporting.
Q: Are there penalties if I do not report through STP on time?
A: During the first 12 months that you report through STP you will be exempt from an administrative penalty for failing to report on time. This is unless the ATO have first given you written notice advising that a failure to report on time in the future may attract a penalty.
Q: Do I need to notify the ATO of how many employees I have?
A: No, the headcount is a self-assessment. You do not need to notify the ATO of your employee numbers.
Q: Do I still need to comply with STP if my software provider is not enabling STP in the product?
A: Yes. If you have 20 or more employees and do not use a payroll solution, you will need to choose one that offers Single Touch Payroll and start reporting from 1 July 2018. Talk to your Deloitte Private manager about products that can best suit your needs.
Q: Do I need to change my payroll cycle?
A: No. Your payroll cycle and requirements to pay your employees won’t change. STP is simply a change to how and when you report payroll information to the ATO.
Q: I report manually, does STP affect me?
A: If you report manually, you are not ready for Single Touch Payroll. To meet your reporting obligations, you will need to purchase a payroll solution or engage an accountant, bookkeeper or a payroll provider to meet your payroll reporting obligations on your behalf.
Q: Why is STP being introduced?
A: The introduction of STP is part of the ATO’s plan to streamline business reporting and move it to a digital format that will improve accuracy and help reduce non-compliance. STP aims to save employers valuable time around EOFY as they would no longer need to process payment summaries and give employees real-time visibility of tax and super information.
Q: I plan to use an accountant or bookkeeper to complete my STP reporting, is that okay?
Yes, an accountant or bookkeeper can handle your STP reporting, you must authorise them to lodge to the ATO on your behalf. This is usually done through a letter of engagement at the beginning on your working relationship.
Q: What information does the ATO receive and is my information safe?
Q: How do I know if I submitted the STP report correctly?
A: When you send your employee pay information to the ATO, you will receive a confirmation message if the file was successfully received. Error messages will be returned via SBR.
Q: I have 20 or more employees (substantial employer) on 1 April 2018, but my employee numbers may drop to 19 or less in the future. Do I still need to report through STP?
A: Yes. Once you become a substantial employer you will be required to continue reporting through Single Touch Payroll even if your employee numbers drop to 19 or less after the headcount. Exceptions can be granted, but these are understood to be unlikely except in rare circumstances.
Q: Are there any exemptions for STP reporting?
A: There are some limited exemptions for STP related to rural areas and seasonal businesses. Please refer to the ATO’s website for more information.
ICB – INSTITUTE OF CERTIFIED BOOKKEEPERS FAQs
Q: If I make a mistake in a pay run, how easy will it be to correct them?
A: When you start reporting through your Single Touch Payroll-enabled payroll solution, you will be able to correct any errors you make in a later Single Touch Payroll report or complete a Full File Replacement to correct the error.
The employer’s payroll records are always the “source of truth”. Therefore, any amendments to past pays, or any fixes required are updated in the employer’s systems and records. At the next PayEvent the ATO will receive the updated YTD information. There is no need to go back and amend past PayEvents.
The employer will still have to “finalise” a payroll year by indicating to the ATO that the information they are now being sent is the final version and can be used for tax returns.
Q: What if the employee does not have a TFN yet?
A: The ATO recommends you use TFN 111 111 111 as this informs the ATO that the employee has applied for a TFN.
Q: What about accountants who decide, when they are doing the financials, to pay directors via journal entries - how will this be captured?
A: Once the employer is in STP they will need to submit payroll information via a report of STP information. The “Adjustment” to payroll would need to be sent to the ATO. The accountant will be required to send a new PayEvent finalising the entity’s EOY payroll wages for those directors only.
Q: Can the last PayEvent include only those employees with changes to ensure annual payment summaries are not re-sent to employees with no change?
A: The employer must send a “Final” PayEvent with the “Final” flag turned on for each employee paid during the year.
Q: How will the ATO know when someone has finished working for an employer?
A: Upon commencement, the start date is notified to the ATO; alternatively, the first pay event will include the start and finish dates of the pay period and therefore the ATO will know when they started. Upon termination, the inclusion of any termination type payments “unused annual leave” or ETPs and the date of payment will be sent to the ATO in the PayEvent data.