The ATO recently introduced new legislation to mandate Single Touch Payroll (STP) reporting for all business in Australia, after a successful rollout to businesses with over 20 employees. This change in legislation is expected to impact around 700,000 small businesses.

What is Single Touch Payroll (STP)?

STP reporting was brought into place to make interactions between the ATO and businesses more efficient. STP allows employers to send tax and super information to the ATO each pay run. For more information on what STP is about visit the ATO website, click here.

What does it mean for me?

If you’re a business with less than 20 employees you have until the 1st of July 2019 to start reporting through STP. Firstly, check with your payroll software provider to find out if they’re supporting STP. Some software allows you to report through STP seamlessly while processing your pay run, while others require customers to work with a third-party Sending Service Provider (SSP), such as MessageXchange, to send the information to the ATO.

SSPs enable the transmission of data from Digital Services Provider (DSP), in other words your software provider, to the ATO.

Your software provider will provide the data required by the ATO	Your SSP transforms and sends the data so it conforms to ATO requirements	Received by ATO for processing

Our solutions can even send you responses from the ATO for you to keep on top of your reporting obligations.

Want to know how our STP solutions can help you? Speak to one of our experts today or fill out your information here and we will be in touch shortly.

In recent years, Australian companies have seen major reporting reforms required by the Government. SuperStream came into effect in 2016, and this year Single Touch Payroll (STP) becomes mandatory for all businesses. If you’ve experienced these changes, you’ll notice how big of a role technology has played. This is how Government, and many businesses alike, see the future. The Australian Government recently announced that they’ll be moving forward with e-invoicing, through which electronic invoices can be exchanged directly between software of trading partners. As well as this, MAAS and MATS are now mandatory for Superannuation funds. This reports contributions and account changes as they happen. In mid-2019, the Australia New Zealand Electronic Invoicing Board (ANZEIB) will be established to provide direction on how e-invoicing will be rolled out in the next few years. E-invoicing is expected to help businesses save an estimated $30 billion in transaction costs in the first 10 years. It is also expected that the Pan-European Public Procurement Online (PEPPOL) interoperability framework will be adopted and ready to use by the end of 2019, making it easier for businesses to exchange invoices with companies in Europe, Singapore, Canada and the USA. These are all part of the Government’s digital transformation project to streamline B2G reporting and gain near-real-time visibility. It allows departments to have access to the same up-to-date information as businesses, their employees and super funds. Under these reporting initiatives, employers are required to report information in a standardised electronic format. By selecting a long-term partner in the beginning, you’ll have a solution that will future-proof your business. It’s important that the solution you choose is flexible and complies with industry-wide frameworks to easily adapt to any new changes. It means that when the time comes for a change, you won’t need to go through the whole process of sourcing for a new provider and establishing a new gateway. Instead, you can use that time to focus on your business. Solutions like MessageXchange allow you to comply with Government legislation like SuperStream, STP and eInvoicing, as well as other needs like EDI. Want to find out more? Have a quick chat with one of our experts.

If you’re about to start your STP compliance journey but aren’t too sure how to go about it, don’t worry. We’ve put together this guide on what you need to get STP ready.

Technology

Update your payroll software to the latest version You need to make sure that your payroll software is STP enabled. Work with your payroll software provider to update your software to the latest version. Of course, if you develop your own payroll software, make sure that your software can export the data that the ATO requires. STP file format and ATO connection If your payroll software is not connected to the ATO, you can work with a sending service provider (SSP) like MessageXchange, to transmit your STP files on your behalf. In this case:

• Check if your software can generate payroll files in the ATO-required XML format. If not, check with the SSP if they can map (‘translate’) your payroll file to the format required by the ATO
• Find out if you need any configurations or testing to start your STP process
• Find out how you will receive the ATO’s responses.

Internal process

Review your payroll process to ensure:

• You are paying your employees correctly
• You are handling employees’ entitlements correctly
• You employees’ details (address, date of birth, name) are up to date and in the correct format.

Under STP, you are not obliged to provide payment summaries (previously group certificates) to your employees, but you can still choose to do so. Decide if you want to continue to issue payment summaries.

Employees

Inform your employees that you are no longer obliged to provide payment summaries. The ATO will make the information that was available on payment summaries visible in their myGov account. They’ll see this under ‘income statement’. Advise your employees to set up a myGov account, if they haven’t already. With a myGov account, they will be able to see their income statement, year-to-date tax and super information online. The ATO have published information on how to setup MyGov accounts. Still have questions? Download our comprehensive guide to achieving Single Touch Payroll (STP) compliance.

Whether you’re a business getting STP compliant early or one who’s starting the search after a deferral, here are five things to know.

1. How to count your employees for STP

Counting employees is required to work out when you need to be compliant with STP. Businesses under 20 employees have until the 1^st of July 2019 to comply, whereas businesses with 20 or more employees have been required to report using STP since the 1^st of July 2018. You'll need to include the following 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 employees 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).

And don't include these in your headcount:

• 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 your organisation is part of a company group, all employees employed by all member companies of the wholly-owned group must be included.

2. Businesses with 19 employees or less

If your organisation has 19 or less employees, STP reporting has been made mandatory from the 1^st July 2019.

3. What STP means for your employees

Although STP mainly affects employers, there are certain things your employees should be aware of. The Government suggests you inform your employees that you’re no longer required to provide them with a payment summary. Under STP, they will be able to view their payment summary, now called ‘income statement’, in their myGov accounts, at the end of the financial year.

4. Maintaining security of your payroll data

With STP, you are required to report sensitive information of your employees to the ATO on every pay run, such as their salaries, allowances, pay as you go (PAYG) withholding and superannuation. Therefore security should be a top priority. When searching for an STP solution provider, check they adhere to rigorous security requirements. These include having a recognised security certification (such as ISO 27001), complying with the ATO’s Operational Framework and being whitelisted for STP by the ATO.

5. Australia isn't the first country to implement STP

There have been similar initiatives implemented in other countries, such as the PAYE RTI, implemented in the UK in 2013. According to a UK Government research, there have been positive changes to the reporting experiences of employers. 80% employers found end of year (EOY) reporting under RTI easier than or in line with their expectation, with 91% expecting the next EOY to be easier than in 2013. 75% of employers experienced minimal burden at EOY with RTI. 67% said that RTI has been very easy or fairly easy to deal with. As a sending service provider (SSP), MessageXchange has worked with a number of payroll software companies to provide a secure gateway for customers to achieve STP compliance. If you are using one of these providers, we’ve got you covered. And even if your payroll software is not listed there, let us know and we can help get you STP ready. Ready to go? Request a quote here. Need more info? Download our comprehensive guide to achieving Single Touch Payroll (STP) compliance.

If you are reading this article, chances are you are aware of the ATO’s Single Touch Payroll (STP) initiative that all Australian businesses will need to comply with from 1^st July 2019. However, if you need a quick recap, check out our previous post here. We understand that looking for an STP provider at this time can be a stressful experience, especially with the end of financial year reporting drawing near. That’s why we have put together a short list of considerations that we think will make your search easier.

1. Security is the top priority

The STP initiative requires employers to report sensitive information, such as employees’ salaries and allowances, pay as you go (PAYG) withholding and superannuation to the ATO, on every pay run. This means that security should be a top priority. You should check if they adhere to rigorous security requirements. For example, they should meet the following conditions:

• have and able to provide you with an ATO recognised security certification (such as ISO27001)
• comply with the ATO’s Operational Framework
• be whitelisted by the ATO for Single Touch Payroll

Meeting these requirements ensures that an STP solution provider has the technical processes and internal measures in place to adequately protect your data, giving you peace of mind when you have a third party dealing with your sensitive information.

2. Flexibility in supporting different file formats

You want an STP solution that is able to adapt to your specific business requirements, reduce time and effort that you can invest elsewhere. One way is to choose a provider that is able to process either the ATO’s XML file, or give you the option to upload any file format conforming with the dataset of STP to the ATO. For example, MessageXchange’s STP solution allows you the option to either upload your STP file through a web browser or post the reports from your software. Find out more here.

3. Single Touch Payroll readiness

A solution that requires minimal changes to your current software can also allow you to quickly and easily become STP compliant. This is especially important if your software is unable to produce an STP compliant file, meaning you need a solution that can map your file to the ATO’s defined XML format. Some solutions, such as MessageXchange’s Single Touch Payroll solution, will let you introduce different types of messages, such as SuperStream messages and Standard Business Reporting (SBR2) services that comes with SuperTICK, SuperMatch, TFN declaration, Practitioner Lodgement Service (PLS). Consider an STP provider that can support your business for more than just your current STP requirements. This means that you will be prepared for any new ATO requirements in the future.

4. System reliability

The ATO requires businesses to report to them each time they pay their employees. Therefore, you want an STP solution provider with minimal service downtime. Choose a provider with high system availability to make sure your reports to the ATO are not delayed. Think about these points when doing your research. Want to know how our STP solution can help you? Speak to one of our Account Managers today. Fill out your information here and we will be in touch shortly.

Our Single Touch Payroll (STP) services (submit and update) have been certified (whitelisted) by the ATO for the latest version of STP (PAYEVNT.0003 2018).

What does this mean?

The ATO has whitelisted (certified) MessageXchange as a Sending Service Provider (SSP) in Production. This means we can transmit Single Touch Payroll files in Production from an ATO whitelisted (certified) payroll software or via uploading files from Colladium. We are also compliant to SBR2 platform and Operational Framework requirements.

How does this benefit you?

You are now able to do Production Verification testing (PVT) through your MessageXchange STP gateway. If you haven’t started, we have included the following steps to guide you through this process:

1.      Get your service certified

All payroll software providers (DSPs) are required to complete a 'Certify a service' form to whitelist your service for the production environment. The ATO will then provide you with a new ProductID to conduct production verification testing (PVT) in the ATO’s production channel.

2.      Begin production verification testing (PVT)

Submit your first STP message to the ATO.

1. Notify DPO@ato.gov.au with participating employer details
2. The ATO will schedule support for the production verification testing (PVT)
3. Lodge the production PAYEVNT for the participating employer
4. The ATO will send back receipt of lodgement
5. The ATO will verify the lodgement
6. You’ll receive acknowledgement of outcome from the ATO.

Once your testing is completed and approved by the ATO, your product will be certified and listed on the SBR Product Register for Single Touch Payroll. You have now completed production verification testing (PVT). Participatingg employers may be transitioned to Single Touch Payroll! Still have questions? Contact us for more information or to sign up.

From the 1^st of July 2018, businesses with 20 employees or more  will need to report payroll information to the ATO at the time their payroll is processed. Business that fail to comply may face penalties.

What is Single Touch Payroll?

Single Touch Payroll, or STP, is an initiative introduced by the Australian Government to provide real-time visibility of businesses and their payroll. It will streamline businesses reporting by allowing reports to be submitted to the ATO at the same time as paying employees. It removes the need to provide annual reports to the ATO. Single Touch Payroll reports will include information about employee salaries and wages, pay as you go (PAYG) withholding information, superannuation contributions and more. While Single Touch Payroll will be mandatory for employers with 20 or more employees, it will be optional for those with less than 20.

What does this mean for your business?

If your business has 20 or more employees, you will need to submit STP information to the ATO at the time of payroll processing. You can begin to submit STP information now, but it will become mandatory from the 1^st of July 2018. The ATO has already defined STP messaging standards, including a message implementation guide and transmission protocol. To ensure compliance by the 1^st of July 2018, businesses must be able to:

1. submit STP information in the correct XML format and
2. submit the XML message to the ATO using the defined ebMS3 AS4 protocol via an accredited STP solution.

MessageXchange is Single Touch Payroll enabled, including ISO 27001 certified, and can assist businesses with compliance. Our secure Gateways can connect to your existing software, map native files to the required STP XML format and send these files via our existing ebMS3 AS4 connection to the ATO. Find more information and request a quote here or contact us to have a chat.