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Information for Employers

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What is Single Touch Payroll (STP)?
STP is a government initiative to streamline business reporting obligations. As a Sage payroll solution customer, STP will allow you to report salary or wages, pay as you go (PAYG) withholding and super information to the ATO from within a Sage payroll solution, at the same time you pay your employees.
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Is STP Reporting mandatory?
From 1 July 2018, STP Reporting is mandatory for employers with 20 or more employees. If you report through STP, you will no longer be required to provide your employees with Payment Summaries.

Reporting is optional for employers with fewer than 20 employees, but the ATO intends to make it mandatory from 1 July 2019. If you do not report through STP, you will still be required to provide your employees with Payment Summaries.
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Why is the ATO introducing STP?
The ATO aims to deliver the following benefits:

  • Give employees real-time visibility of tax and super information
  • ATO is able to pre-fill tax returns and lodge using myTax or a Tax Practitioner
  • Data match of employers’ super payments and payments to funds
  • Streamline business reporting
  • Employee Validation
  • TFN Declaration
  • Payment Summaries
  • BAS Reporting
  • Help reduce or even eliminate the incidence of non-compliance.
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We have part timers, full timers, contractors etc. How is “employees” defined?
You need to do a full headcount, not a count of your full-time equivalent (FTE) employees paid through your payroll. If contractors are paid outside of payroll – for example paid via your finance department – they are NOT included in your headcount.
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Our headcount changes all the time. How do I make an accurate count?
You will need to count the number of employees on your payroll on 1 April 2018.
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What if I make a mistake in an STP Report?
As the values sent for employees are YTD values, when the employee is next paid, the new YTD values will be sent, allowing your natural business processes to handle corrections.

The ATO will allow you to correct any errors you make in the next cycle of reporting.
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Upon sending the pay event, will messages be one-way (i.e. from employer to ATO)?
No. When the pay event is sent, messages will be sent back to the employer if the file was successfully received. Error messages identified through processing of the payroll event will be returned via SBR.

The ATO is currently designing the process for additional messages they will provide employers after analysing payroll event information.
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I report manually (for example, on paper). Is STP relevant to me?
From 1 July 2018, you must report payments such as salaries and wages, PAYG withholding and super information through an STP-enabledpayroll solution or outsourcer, or accountant.

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When will the STP-enabled versions of Sage payroll solutions be released?
Although the ATO’s requirements for STP are yet to be finalised, we are confident of addressing the current requirements prior to the 1 July 2018 commencement date. Over the coming months, we will continue to provide information to help you understand what you need to do to get ready for STP.

This information will cover the full range of Sage payroll solutions:

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Do I have to change my pay event frequency?
Your payroll cycle does not need to change. Your Sage payroll solution will report at each pay event.

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How will monthly cycles work when the month is not finished?
Creating the pay event will be linked to creating your EFT file, as the pay event data is to be reported to the ATO on or before the date the employee was paid. You are able to continue the usual processing to complete the month activities and not rush to close the month in order to report in time.

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Will the STP solution be able to handle multiple entities (i.e. separate ABN’s)?
Yes. Our payroll solutions will be able to generate multiple records at the pay event if you are processing for more than one company.

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How will a change of Super fund in the middle of the month work with STP?
STP reporting requires the SG contribution and the OTE values that this contribution relates to. As long as the employee is attached to a Super Fund and pays are calculated, these values will be output. The fund details are not output as part of the pay event.

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How does STP affect RESC and Reportable Fringe Benefits reporting obligations?
RESC and Reportable Fringe Benefits will continue to be included as part of the regular STP reporting. Where RESC is already identified on Super contributions, this would be reported at each pay event. Reportable Fringe Benefits would generally be processed using an Adjustment Pay Event.

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How does STP affect the more infrequent scenarios of cross-border currency conversions, gross-ups, and reconciliations?
As Foreign Income is already part of current end of financial year processing, if the payroll product you use has this option available, it will be included when reporting employee’s YTD values. This process is best managed once a year for employees that are categorised for Foreign Income and would be processed using an Adjustment Pay Event.

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Will Sage run training sessions?
Yes. Once the ATO finalises its requirements, we will complete our payroll solution updates and announce training options.

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What steps do we (the customer) need to take?
Please view our comprehensive checklist to ensure you are ready for Single Touch Payroll.

Visit our STP Resources to download a checklist

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I use Sage temps when I or my payroll colleagues are on leave. Will they be STP trained?
Yes. Sage Recruitment payroll contractors will be fully trained.

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As an employer, what do I need to report?
As an employer reporting under Single Touch Payroll, there are a number of withholding payments that are either:

  • Mandatory;
  • Voluntary; or
  • Cannot be reported.
Please refer to the latest guidance from the ATO

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How do we report payroll information, or fix information already reported?
Please refer to the latest guidance from the ATO around how to report and fix payroll information, and rules on how to finalise payroll information at the end of financial year (EOFY).

Visit ATO Site

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How do we correct a pay event report in which we discover an error?
The ATO will provide you with a period of time to correct your Single Touch Payroll report without being liable to a penalty for making a false or misleading statement. This is called a 'fix', and if you make that fix within the grace period, you will not be liable to a penalty.

Please refer to the latest guidance from the ATO

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How do we handle the commencement or cessation of employment?
In this case, you have options.

Please refer to the latest guidance from the ATO

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How do we finalise our Single Touch Payroll reporting?
You may be exempt from giving payment summaries and a payment summary annual report for the amounts you reported through Single Touch Payroll. This information will be made available to your employees in ATO online services, accessed through myGov. Your employees can also request a copy of this information from the ATO.

Please refer to the latest guidance from the ATO

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How do we transition to Single Touch Payroll?
Although ATO STP requirements and testing environments are not yet finalised as of 12 February 2018, Sage intends to begin its communications to customers around preparations for STP this month.

Please refer to the latest guidance from the ATO

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How do we remit PAYG withholding?
If you notify your PAYG withholding liability on an activity statement, the ATO will pre-fill the employer-level gross payment and withholding amounts you report in pay events into labels W1 and W2 on your activity statements.

Please refer to the latest guidance from the ATO

Information for Employees

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What are the benefits of STP Reporting for an employee?
The ATO’s intention with STP Reporting is to allow an employee to:

  • complete both the superannuation choice and TFN declaration on MyGov;
  • see a list of all the superannuation funds with which the employee has an account;
  • see the default fund(s) of the employer;
  • see YTD pay details, including across all super accounts and all employers reporting for the employee;
  • manage their tax position (e.g. consolidate super balances, apply for withholding variation if required, correct TFN declaration details); and
  • no longer have to report non-payment of Sup Guarantee to the ATO.

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Where can I access my tax and super information?
If your employer reports to the ATO through STP, you will be able to see more up-to-date tax and super information in myGov.
Please refer to the latest guidance from the ATO
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Will I still get a Payment Summary?
If your employer reports your tax and super information to the ATO through STP, they will not have to provide you with a payment summary. The ATO will make this information available to you through myGov.

If your employer does not yet report your information through STP, they will need to provide you with a payment summary.

Our payroll solutions will still provide the option to produce Payment Summaries.