Do you need to use Single Touch Payroll?

To work out if you have to report through Single Touch Payroll (STP) from 1 July 2018, all you need to do is count the number of employees on your payroll on 1 April. If you have 20 or more employees, you’ll need to get ready for STP this year.

You can do the headcount after 1 April, but the count must reflect the number of employees who were on your payroll on 1 April. You don’t need to send the headcount to the ATO, but you should keep a copy of the count for your records.

Busy times such as long weekends, seasonal work or special events often mean employers need to hire additional workers to keep up with the workload and temporarily increase their headcount to 20 or more employees on 1 April.

You will be exempt from reporting under STP for the 2018 financial year if you:

  • had fewer than 20 employees for at least 10 out of the preceding 12 months
  • reasonably expect to have fewer than 20 employees for at least 10 out of the immediately following 12 months.

It is important to no note that once you become a substantial employer you will need to continue reporting through STP even if your employee numbers drop to 19 or less – unless you apply for and are granted an exemption.

Take care also if your business is part of a company group – in that case you must include the total number of employees employed by all member companies of the wholly-owned group.

How to count your employees

Include in headcount:

  • full-time employees
  • part-time employees
  • casual employees and seasonal workers who are on your payroll on 1 April and worked any time during March (NB there are exemptions to counting seasonal workers who were employed for a short-time only)
  • employees based overseas
  • any employee absent or on leave (paid or unpaid).

Don’t include in headcount:

  • any employees who ceased work before 1 April
  • casual employees who did not work in March
  • independent contractors
  • staff provided by a third-party labour hire organisation
  • company directors
  • office holders
  • religious practitioners.

Directors, office holders and religious practitioners are not included in the headcount. They are not considered employees within the common law meaning of the term.

However, when you start reporting through STP you will need to report their payment information. This is because the payments are subject to withholding and are currently reported in the Individual non-business payment summary.

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