Single Touch Payroll Discussion Paper

On 28 December 2014, the government announced that they had the intention of simplifying taxation and superannuation reporting obligations through the implementation of ‘Single Touch Payroll’.

Single Touch Payroll entails that employers are required to electronically report payroll and superannuation information to the ATO when employees are paid. This is expected to be done using Standard Business Reporting (SBR)-enabled software. As well as this, TFN declarations and Super Choice forms will be stream lined through the provision of digital channels where the processes will be simplified for employees.

The Single Touch Payroll will also cut the red tape surrounding payroll and super information through the notification of government agencies such as the Department of Human Services (DHS) and superannuation funds of when an employee’s contract is terminated.

The ATO intends for Single Touch Payroll to be implemented from July 2016, with employers “operating in a Single Touch Payroll environment” by 1 July 2019, with few exceptions.

In order to meet their obligations, employers will be required to acquire and use the appropriate payroll software.

The government has yet to finalise the decision regarding Single Touch Payroll, and its implementation throughout the country. The Treasury released a paper providing members of the public the opportunity to lodge written submissions on any issues they may have. This discussion paper sought views on:

• Transition arrangements;
• Suggestions minimising the implementation and compliance costs for employers; and
• The potential for employers to remit PAYG withholding and the super whilst employees are paid.

In the discussion paper released, it is noted that businesses which actively utilise the present delay between the payroll cycle and their tax and super obligation event to manage the cash flow of their business may face cash flow difficulties.

The lodgement of submissions closed on 6 March 2015.

Ref – ATO website – Consultation –Single Touch Payroll Discussion paper.

This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.