CHANGES TO EMPLOYER PAYROLL REQUIREMENTS

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Posted February 19, 2018

Since the introduction of compulsory superannuation payments in 1992, regulating the payment of super has been a thorn in the side of the Australian Taxation Office (ATO), with many businesses continuing to flaunt the law and withhold superannuation payment from their staff, an illegal practice that the ATO is now significantly cracking down on.

 

From the 1^st of July 2018, the ATO Single Touch Payroll System will be mandatory for ALL businesses with over 20 employees. Single Touch Payroll is a reporting change for employers, meaning that employers will need to report payments such as salaries and wages, PAYG withholding and super information directly to the ATO. For businesses of 19 staff or less, the same regulation will come into effect from the 1^st of July 2019, with the same requirements. Those salon owners who do not comply with the new Single Touch Payroll System requirements may be penalised.

 

All salon owners must count the number of employees on your payroll – not just full-time staff, but all staff – by the 1st of April 2018 to determine whether you are a ‘substantial employer’ and required to switch to the ATO Single Touch Payroll System in 2018. Once you are considered a substantial employer, you will be required to continue reporting through Single Touch Payroll, even if your employee numbers drop below 20.

 

Once you start reporting to the ATO through your Single Touch Payroll-enabled software, you will be sending them your tax and super information on or before each pay day. If you pay your staff weekly, this information needs to be submitted weekly, or fornightly if your pay cycle is fortnightly, which can turn into quite a bit of extra work. This is to ensure that all business owners are meeting their required contributions for superannuation for all staff and reducing the regulatory and compliance burden on business owners.

 

This change makes the process of managing payroll more difficult and time-consuming for employers who continue to self-service their payroll rather than outsourcing to a system like HABA Payroll. HABA Payroll will automatically submit these reports to the ATO on behalf of the salon owners we work with to ensure that they remain compliant at all times.

 

Don’t run the risk of being penalised by the ATO for not complying with the Single Touch Payroll System and make sure that you are ready for the 1^st of July. There are a number of preparation steps that salon owners need to take to get ready, so read about your obligations and requirements on the ATO Website here.