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Single Touch Payroll Reporting in Australia - Big Data and Government

From the 1 July 2018, it will be mandatory for all organisations in Australia who have 20 employees or more to “real-time” file their payroll data with the Commissioner of Taxation. By the 1 July 2019 all organisations no matter what size need to file.  The Single Touch Payroll Reporting or STPR as it is known is one of the largest “big data” regulations in respect to employee data in Australian history.  What do you need to know?

BDO has done a very comprehensive overview of STPR.  Here are some of the significant changes: 

Data Provided to Tax Commission - Ordinary Time Earnings, salary and wages, allowances, deductions, superannuation information and Pay-As-You-Go (‘PAYG’) withholding information will be reported and available to the Commissioner in ‘real time’ when payroll is periodically processed by the employer.  This will require changes to software to facilitate the reporting.  

Reducing paperwork - STPR should reduce the paperwork burden on businesses.  The STPR reports for PAYG withholding will become the approved form for reporting withholding and the ATO (Australian Tax Office) will prefill companies  BAS report with the relevant data (note – for non-Australians a BAS report is like a VAT, or GST filing that businesses have to do quarterly).  And employers will no longer be required to submit an annual PAYG report to the ATO.  Employers may no longer need to provide payment summaries to employees, as the employees will have access to their payroll information via their myGov account.

The big plus for the Australian Government is that STPR means the Tax Commissioner has more  information to validate and check what individuals are being paid.  According to BDO, the Commissioner will have access to information to perform data-matching in determining if all Superannuation (the Australian retirement savings program a parallel would be the 401k in the USA) and PAYG withholding obligations are met. Any errors by employers using this system are likely to increase the chances of an ATO audit or review. Companies could run reports periodically from the new STPR software that show all the information that has been reported to the ATO, allowing errors to be identified in time to correct the amounts before the end of the financial year.

The big thing STPR allows is the sharing of pay information between government departments, in real-time, including the parts of the government like CenterLink which determines what government benefits an individual receives.

For payroll technology providers and those that provide payroll as an outsourced service, it means that they need to have payroll software that meets the requirements of STPR and agree who is responsible for filing the required report.  Will it be the outsourced provider who does your payroll processing or will it be the companies HR or Finance function that will submit the report? 

Directors of companies also can be held liable if the reports are not submitted on time.  Directors may be issued with a director penalty notice (DPN) by the Commissioner of Taxation in respect of a penalty which is equal to your company’s unpaid liabilities. And, under STPR, the ATO is going to be aware of any obligations before they are due and payment breaches much quicker than they have in the past, allowing them to take action faster than ever before. For more information on Director obligations and requirements, please see the AICD website HERE.

Perhaps the Tax Commissioner is going to give ADP Research a run for their money on salary reporting?  Watch this space for the next chapter in what the ATO does with this wealth of information.

Article by Mary Sue Rogers

Picture source - Attache Software

Posted On : 15-10-17

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