• Information for employers

    Single Touch Payroll reporting starts from 1 July 2018 for employers with 20 or more employees.

    To find out if you need to be ready by then, you will need to do a headcount of the employees you have on your payroll on 1 April 2018 (see How to count your employees).

    If you have 20 or more employees on that date you will be a ‘substantial employer’. You will need to report through Single Touch Payroll from 1 July 2018. This is now law.

    If you have 19 or less employees, Single Touch Payroll reporting will be optional until 1 July 2019. It will be mandatory from that date, subject to legislation being passed in parliament.

    How your reporting will change

    Your payroll solution will need to be updated for Single Touch Payroll reporting.

    When you pay your employees through your Single Touch Payroll-enabled solution you will be reporting payments such as their salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and super information to the ATO at the same time.

    Your payroll cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly. You may have different pay cycles for different employees.

    It simply means that when you complete your payroll, the tax and super information for each employee will be sent to us. This is a more streamlined way of reporting to us.

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    How to count your employees

    You will need to count the number of employees on your payroll on 1 April 2018 to find out if you are a ‘substantial employer’. You need to do a headcount, not a count of your full time equivalent (FTE).

    If you have 20 or more employees on 1 April, you will be a 'substantial employer' and will need to report through Single Touch Payroll from 1 July 2018.

    Once you are a substantial employer you will be required to continue reporting through Single Touch Payroll even if your employee numbers drop below 20.

    Who to include in your headcount

    You need to include the following employees in your headcount:

    • full-time employees
    • part-time employees
    • casual employees who are on your payroll on 1 April and worked any time during March
    • employees based overseas
    • any employee absent or on leave (paid or unpaid)
    • seasonal employees (staff who are engaged short term to meet a regular peak workload, for example, harvest workers).

    Do not include:

    • 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

    If you are part of a company group, the total number of employees employed by all member companies of the wholly-owned group must be included.

    Penalties, exemptions and deferrals

    When you start reporting through Single Touch Payroll the first 12 months will be a transition period.

    Penalties

    During the first 12 months you report through Single Touch Payroll you will be exempt from an administrative penalty for failing to report on time. This is unless we have first given you written notice advising that a failure to report on time in the future may attract a penalty.

    Exemptions

    We may grant you an exemption from Single Touch Payroll reporting if:

    • you are located in a rural area with no reliable internet connection
    • you are classed as a substantial employer (20 or more employees) for a short period of the income year – for example, due to harvesting activities.

    If you are granted an exemption you will not need to start Single Touch Payroll for the year(s) you are covered by the exemption. You must continue to comply with your existing PAYG withholding obligations including:

    • reporting and paying your PAYG withholding liability
    • giving payment summaries to your employees
    • giving a payment summary annual report to the Commissioner of Taxation.

    Deferrals

    We may defer the date you're required to start your Single Touch Payroll reporting if:

    • your payroll solution will not be ready for Single Touch Payroll reporting by 1 July 2018 – we are working with digital service providers to determine if deferrals are required. Contact your provider to check if your software will be ready.
    • you have entered administration or liquidation
    • you have been impacted by a natural disaster
    • you are affected by a circumstance outside your control.

    If you won't be ready to start reporting from 1 July 2018, you will need to request a deferral before that date. Your registered agent can request a deferral on your behalf.

    We will publish more information about penalties, exemptions and deferrals soon, including how to apply for an exemption or deferral.

    About payroll solutions

    If you already have a payroll solution

    A payroll solution is the accounting, business management or payroll software you use to run your payroll and pay your employees.

    If you become a substantial employer on 1 April 2018, you will need to update your payroll solution to report through Single Touch Payroll from 1 July 2018. This is unless you have been granted a deferral or exemption.

    As payroll software and service providers update their products, you will be able to check when your solution is ready.

    You will be able to see which payroll solutions are Single Touch Payroll-enabled in the product catalogue on the Australian Business Software Industry Association (ABSIA) website. Over time, this catalogue will be updated with information about payroll solutions that are Single Touch Payroll-enabled.

    Contact your payroll software or service provider to find out when your payroll solution will be ready for Single Touch Payroll reporting.

    If you don’t have a payroll solution

    If you become a substantial employer on 1 April 2018, you will need to choose a payroll solution that is Single Touch Payroll-enabled and suits your business needs.

    There are a number of options if you don’t have a payroll solution:

    • You may wish to speak to your tax practitioner to find out which payroll solution would be best for you.
    • You can use a registered agent or payroll service provider to report to us through Single Touch Payroll on your behalf.
    • You can check which payroll solutions are Single Touch Payroll-enabled in the product catalogue on the Australian Business Software Industry Association (ABSIA) website and choose one of them. Over time, this catalogue will be updated with payroll solutions that are Single Touch Payroll-enabled.

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      Last modified: 17 Oct 2017QC 50662