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  • Setting the record straight on Single Touch Payroll

    The ATO is aware of recent media commentary regarding the implementation of aspects of Single Touch Payroll. This commentary relates specifically to proposed changes to the process when an employee starts a job.

    Under the proposed changes, individuals have the option of completing their Tax File Number (TFN) declaration and Superannuation Standard Choice forms online using myGov, or through their employer.

    As the government agency leading the implementation and administration of the Single Touch Payroll, the ATO would like to clarify some misleading assertions made in this commentary.

    • Assertion: New employees may be ‘pressed’ to use the online employee commencement form to choose a super fund.

    Incorrect. The online service is optional. Employees can choose to use existing paper processes to provide their Tax File Number declaration and choice of super fund. This is confirmed in the Explanatory Memorandum to the Budget Savings (Omnibus) Bill 2016.

    • Assertion: The changes to employee commencement processes have come without Parliamentary scrutiny.

    Incorrect. The ATO implements government policy and develops implementation arrangements based on the law. The Budget Savings (Omnibus) Act 2016 was passed by Parliament on 16 September 2016. The Explanatory Memorandum states there would be no change to an employee’s ability to make a choice of super fund and no change to an employer’s responsibility to provide information as required about super choice.

    • Assertion: New employees could be pushed into nominating a super fund without enough information, and without the reassurance of a default safety net.

    Incorrect. Current safeguards still apply regarding default super funds. Where no choice is made, entitlements are paid to the employer’s default fund. New employees starting their first job can choose the employer’s default fund through the online form. Other super accounts are not displayed until the member has separately opened a new account with a fund.

    • Assertion: Employee commencement forms fail to allow for account consolidation.

    Incorrect. Once an employee has successfully entered the information to be sent to their new employer, they are prompted to view and consolidate any existing accounts.

    • Assertion: Single Touch Payroll will be mandatory for businesses with 20 or more employees from 1 July 2018.

    Correct. However, the online employee commencement forms are optional for both the employer and the employee.

    • Assertion: The streamlined employee commencement process is designed to register and track business hiring new employees.

    Incorrect. The ATO is seeking to provide a more streamlined experience for employers and employees. It is not about ‘tracking’ businesses.

    Further clarification about the new employee commencement process can be found in the Explanatory Memorandum to the Budget Savings (Omnibus) Bill 2016 (PDF 2.58MB)This link will download a file.

    Last modified: 16 Aug 2017QC 53108