In the previous article, we discussed the changes to Australia’s new payroll process, Single Touch Payroll (STP), and why businesses must digitise payroll to ensure they are STP-compliant.
This week, we discuss seven helpful tips to assist businesses and HR managers in getting STP-ready, to foster a smoother transition process.
Do your headcount: Remember that the 1 July 2018 effective date applies to “substantial employers” – which is those businesses with 20 or more employees, as at 1 April 2018. Be aware though that there are certain exclusions from the count, so refer to the ATO website for details.
Know your STP requirements: What documents do you need to share with the ATO and when (for example, employee superannuation and taxation)? Have you checked whether your payee records and payee payment information are correct? If not, update these now.
Check that your payroll system is STP-compliant: Contact your payroll provider to determine if it is and what support they offer. If it’s clear that it won’t be compliant by 1 July 2018, you may need to apply to the ATO to defer your start date, or investigate alternative software options that will be STP-compliant from 1 July 2018, such as ELMO Cloud HR & Payroll.
Communicate changes to all staff: Ensure all employees understand the changes to the system and how this may impact them. It is also a good idea to get your employees to register on the myGov website because annual payment summaries and other information will appear in that portal.
Top up your team training: HR teams, payroll officers and other stakeholders (which may include your organisation’s employees) who use payroll will need appropriate training on navigating the new STP system – a service that should be provided by any credible cloud payroll provider.
Migrate to digital: Research tells us 51 per cent of businesses have been in the process of redesigning their digital business models, with a similar percentage planning to leverage digital and mobile tools to improve HR processes. These tools extend and connect to the entire employee lifecycle and include integrated and automated recruitment, performance management, learning, wellness, feedback, employee engagement, compliance, and payroll.
Invest in an STP-friendly cloud payroll system: When it comes to investing in a best-fit system, business owners and HR managers should be looking for advanced technology software solutions hosted in a premium, cloud-based facility governed by a high degree of security, redundancy and reliability. A system that features an API also makes connecting to external systems such as rostering, and time and attendance, much easier to achieve.
Once you have determined when and how you are required to report STP, you can ensure the business is ready for reporting the correct information to the ATO by following this checklist:
|❏ Ensure the accuracy of your business information stored within your payroll system (company name, ABN, address, phone number, email address).
❏ Check the accuracy of your business information held by the ATO and ensure it matches the information in your payroll system.
❏ Ensure the accuracy of your employees’ information stored within your payroll system (full name, tax file number, contact information, address, date of birth) as these payroll records must match ATO records, to ensure STP compliance.
|❏ Ensure your payroll provider is correctly calculating PAYG, superannuation and wages.
❏ Identify how over-payments are handled – all over-payments will now need to be reported to the ATO as part of STP Legislation.
|❏ Employees will need to register for an account on myGov.
❏ Ensure the accuracy of their own employee information with Payroll (full name, tax file number, contact information, address, date of birth) as Payroll records must match the ATO records of that individual.
|❏ Download a summary factsheet (PDF) from the ATO Website which will explain:
❏ what is changing for employers
❏ what employees need to do
❏ Provide notice to your employees about:
❏ The changes that STP will bring to the business
❏ How the changes will impact them
❏ *To ensure the process is smooth, senior members of your business undertake the process, before filtering it through to the rest of the business.
KEEP TRACK OF
|❏ Visit the ATO website and follow them on Facebook, Twitter and LinkedIn to ensure you have the most recent information regarding STP.|
Once you have completed this checklist you will be able to ensure that all the data being sent to the ATO is correct and will help ensure STP data is not rejected by the ATO.
Danny Lessem, CEO, ELMO Software Limited