Show download pdf controls
  • Get ready for Single Touch Payroll

    Single Touch Payroll (STP) is mandatory for 'substantial employers' (those with 20 or more employees) from 1 July 2018.

    To find out if you are a substantial employer, count the employees on your payroll on 1 April 2018:

    • Count each employee, not the full time equivalent (FTE).
    • 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.
    • You don't need to send us your headcount information. This is for you to determine if you need to start STP reporting from 1 July 2018. You may want to keep a copy for your own records.
    • If you are part of a company group, you must include the total number of employees employed by all member companies of the wholly-owned group.

    On this page:

    How to count your employees

    Include in headcount:

    • full-time employees
    • part-time employees
    • casual employees and seasonal workers who were on your payroll on 1 April and worked any time during March - 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.

    Get ready for STP checklist

    1. Speak to your payroll software provider:  
      • Find out how your payroll software provider will offer STP reporting – this may be through an update to your existing software, or an additional service.
      • Check if they have a deferred start date for your product.
      • Find out what support they will offer to their clients to transition to STP.
      • Subscribe to their communications – this may be email, newsletter or web updates.
       
    2. Connect with us:    
    3. Review your business processes:  
      • Make sure the right people in your business know about STP – especially your payroll staff.
      • Check if you are paying your employees correctly.
      • Check if you are calculating your employees’ super entitlements correctly.
      • Check if you are addressing overpayments correctly.
      • Is your employee information accurate, including names, addresses, date-of-birth records?
       
    4. Apply for more time if you need it:  
      • If your software will be ready, but you won’t, you will need to apply to us for a deferred start date.
      • If your payroll software provider has a deferred start date, and you still need more time, you will need to apply for your own deferral.
      • Make sure you follow the ATO guidelines and provide all the evidence required. We only provide deferrals for extenuating circumstances.
       
    5. Update your software when it is ready, and start reporting to us:  
      • We will help and support you through your first year of reporting.
      • It's okay if you make a mistake – you will be able to make corrections.
      • The first year is a transition and penalties will generally not apply.
       

    You can also download the Single Touch Payroll get ready checklist (PDF 194KB)This link will download a file  

    Deferrals

    Employers who won't be ready to start STP reporting from 1 July 2018, or by their software provider's start date, will need to apply to us for a deferral.

    Registered agents providing a payroll service, or supporting employers to transition to STP, can apply for a deferral for their clients. This includes registered tax agents, registered BAS agents and payroll service providers.

    You must be a registered tax or BAS agentExternal Link to report through STP for your clients, or apply for a deferral on their behalf.

    Instructions:

    1. Right click on the link and select ‘Save (link) target as’ (wording may vary depending on your internet browser)
    2. Open the form and enable JavaScript if prompted
    3. Complete and save the form on your computer
    4. Attach the form and any supporting documentation to your portal message.

    Payroll software providers

    Payroll software providers that will not have their payroll solutions ready to offer STP reporting to their clients by 1 July 2018 need to apply for a deferral now.

    Deferrals need to be sought for each software version that will not be ready.

    If we grant a deferral for a specific software version, this will cover the existing clients who use that version. These customers will need to start reporting through STP on or before the deferred date.

    Your payroll software provider will let you know if and when a deferral is granted for your software version. If you are unable to get ready by this deferred date, you will need to apply for your own deferral in addition to this.

    Employers

    Employers who are unable to start reporting through STP from 1 July 2018 need to apply to us for a deferral.

    Deferrals will be considered if you:

    • are unable to get ready by your software provider's deferred start date
    • are transitioning to a new STP-enabled solution
    • are using a customised payroll solution and you need time to configure and test your updated product
    • have complex payroll arrangements and need additional time to transition to STP
    • have entered administration or liquidation
    • have been impacted by a natural disaster
    • are affected by other circumstances which are out of your control.

    You can apply for a deferral using the online Single Touch Payroll – employer deferral request (NAT 74985, PDF 1.7MB)This link will download a file.

    You or your registered agent can submit your completed form using the Business Portal, Tax Agent Portal or BAS Agent Portal. You need to download the above form using a desktop or laptop device.

    Instructions:

    1. Right click on the link and select ‘Save (link) target as’ (wording may vary depending on your internet browser)
    2. Open the form and enable JavaScript if prompted
    3. Complete and save the form on your computer
    4. Attach the form and any supporting documentation to your portal message.

    Registered agents providing a payroll service

    If you provide a payroll service to any clients with 20 or more employees, you will need to report through STP-enabled software on their behalf from 1 July 2018.

    Payroll services include processing payroll on behalf of the employer, or performing any payroll related functions that involve interpreting legislation and assisting employers to calculate their PAYG withholding and super guarantee liability. For more information, refer to the Tax Practitioners Board (TPB) Information sheet: TPB(I) 31/2016 Payroll service providersExternal Link.

    Apply for a deferral if:

    • the payroll software you use has a deferred start date from the ATO and you need additional time to implement STP beyond that date
    • the payroll software you use will be STP-enabled by 1 July 2018 but you need additional time to implement STP beyond that date
    • the payroll software you use is discontinued, and you need additional time to implement new STP-enabled payroll software
    • the software used by your clients will not be STP-enabled by 1 July 2018 and you need additional time to implement the solution across all relevant clients
    • the software used by your clients will be STP-enabled by 1 July 2018 but you need additional time to implement the solution across all relevant clients
    • there are other extenuating circumstances where you or your clients require additional time to implement STP.

    You will need to provide evidence and demonstrate a transition plan to get ready by the requested deferral date.

    When you apply, list all the clients who need to be covered by the deferral. If granted, you or your employer clients will need to start reporting through STP on or before the deferral date granted.

    You can apply for a deferral using the Single Touch Payroll deferral request – Registered agents providing a payroll service (NAT 75015, XLSX 44 KB)This link will download a file form.

    Submit your request though the Tax Agent Portal or BAS Agent Portal:

    1. Complete all the required fields in the deferral request form and save a copy in Excel format to your computer.
    2. Select General questions/problems/help as your portal message topic.
    3. Enter Single Touch Payroll Deferrals as the message subject.
    4. Attach your deferral request and supporting documentation.

    After you submit your request

    It may take up to 28 days for us to process your request around peak lodgment dates. Do not resend a further deferral application for the same clients within the 28-day processing period. This could cause possible delays to the processing of your original request.

    We will let you know when your request has been processed, and provide details of the new deferral dates for eligible clients through either the Tax Agent Portal or BAS Agent Portal.

    If your deferral request is varied or declined you will receive notification through the portal.

    Exemptions

    We will consider granting an exemption for reporting a particular employee or group of employees through Single Touch Payroll (STP). This includes an employee of a department, agency or entity of a foreign government not resident in Australia, such as a diplomat.

    You can also seek an exemption for reporting an employee who is not recorded in an Australian payroll system.

    If you are granted an exemption for an employee or group of employees, you will need to report your other employees' information through STP.

    If you are granted an exemption you don't need to start STP reporting 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 ATO.

    Employers with seasonal workers

    We understand some employers need to employ casual workers for a short time during peak periods – such as a long weekend, or due to seasonal work.

    This may increase the number of employees on your payroll to 20 or more on 1 April 2018.

    You will be exempt from reporting under STP for the 2018-19 financial year if both of the following circumstances apply:

    • you had fewer than 20 employees at any one time for at least 10 continuous months out of the preceding 12 months (that is, from 1 April 2017 to 31 March 2018)
    • you reasonably expect to have fewer than 20 employees at any one time for at least 10 continuous months out of the 12 months immediately after 1 April 2018 (that is, from 1 April 2018 to 31 March 2019).

    If you are a member of a wholly owned group, you will only be exempt if the whole group satisfies these two circumstances.

    If you choose to use the exemption for seasonal workers, you don't need to tell us. However, you should keep a record of your decision.

    How to apply for an exemption

    You or your registered agent can submit a request using the Business Portal, Tax Agent Portal or BAS Agent Portal:

    1. Select General questions/problems/help as the message topic.
    2. Enter Single Touch Payroll as the message subject.
    3. Include the following information:  
      • the number of employees on your payroll – this will help us understand the size and complexity of your business
      • the reasons why you are unable to report through STP
      • any steps you have taken to attempt to get ready for STP
      • any supporting evidence that may help us understand your circumstances.
       

    If you are requesting an exemption for reporting a particular employee or group of employees, provide:

    • the details of the employee
    • the nature of their employment
    • any supporting evidence.

    When we receive your request we may contact you for further information.

    Note: The Australian Government announced Single Touch Payroll will be expanded to include employers with 19 or less employees from 1 July 2019. This is subject to legislation being passed in parliament.

    Last modified: 30 May 2018QC 54703