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Single Touch Payroll

STP Industry Engagement Forum

Presented by John Shepherd, Assistant Commissioner, Single Touch Payroll and ATO Directors, Australian Taxation

Office / 6 April 2017

Contents

STP overview including:

> The Minister’s Announcement

> The law for Single Touch Payroll (STP)

> What is on the STP IT schedule

> How STP works – the design elements of payroll, corrections, employee commencement and Superannuation

> STP change readiness, including:

– Solution provider and employer readiness

– ATO systems readiness

– ATO internal business readiness

UNCLASSIFIED – STP Industry Engagement Forum 2

The Minister’s Announcement

On the 21st of December 2015, Minister Kelly O’Dwyer announced STP as a change to the way employers report tax and

superannuation information to the ATO. When an employer pays their employee, the information will be sent to the ATO from their payroll solution.

> Under STP employers will be able to report salary or wages PAYG withholding and super information directly to the ATO

from their Payroll solution at the time they pay their employees.

> Superannuation contribution information can be reported to the ATO when payments are paid to the fund.

> For those with 20 or more employees, STP reporting will be mandatory from 1 July 2018.

> Although there is no legal obligation, employers can begin to report through STP from 1 July 2017 as payroll solutions

become available.


The Minister’s Announcement cont.

> Employers will also have the option to voluntarily pay their PAYG withholding at the same time they pay their staff.

> STP includes an optional streamlined process for individuals commencing employment. An employer may allow their

employees to complete their TFN declaration and Superannuation Standard Choice forms using myGov or if available

through their payroll solution.


Design Overview

Payroll/

update

Super

June/September Sep Dec

Support and Readiness

D

i

s

p

l

a

y

Corrections

Framework

Employee

Commencement

D

i

s

p

l

a

y

Law

STP IT Schedule

The law for STP

Payroll/

update

Super

Law



D

i

s

p

l

a

y

Corrections

Framework

Employee

Commencement

D

i

s

p

l

a

y

STP IT Schedule

The law for STP

The STP law was legislated on 16 September 2016, forming part of the Budget Savings (Omnibus) Act 2016.

Who has to report?

> Employers’ with 20 or more employees will be required to report under STP

When do I start reporting?

> If I have 20 or more employees on 1 April each year I am required to report from the following 1 July.

What and how often do I have to report?

> Salary or wages PAYG withholding and super guarantee obligation when I pay my staff

> Superannuation contributions when they are made to the fund.


The law for STP cont.

What happens if I am not ready or can’t report?

> The Commissioner can provide a safety net via a time limited exemption or deferral.

What happens if I make a mistake?

> A grace period will be provided for corrections to a STP report.

> Failure to lodge penalty relief for the first year of compulsory reporting.

What don’t I have to do in the future if I report via STP?

> The employer will not have to provide an employee with a payment summary for those payment summaries

reported through STP.

> Send the TFN declaration to the ATO if my employee has used the myGov commencement process.


STP Exemptions – How they will work

Exemptions can be granted or provided to a class of taxpayers using a legislative instrument or to individuals on

application.

Potential classes identified through consultation include:

> Seasonal

> Directors

> International inbound secondments

Potential criteria for individual exemptions may include:

> Remote location

> Internet accessibility

> IT literacy

> Software delays


What is on the STP IT Schedule?

Payroll/

update

Super



D

i

s

p

l

a

y

Corrections

Framework

Employee

Commencement

D

i

s

p

l

a

y

Law

STP IT Schedule

STP June Release

STP September Release

STP December Release

Delivery of STP IT schedule


2017 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

JUN

E G

O-L

IVE

SEP

GO

-LIV

E

DEC

GO

-LIV

E

Enabling employers to adjust payroll event, establishing onboarding for individuals and

provide on-line display for employees, employers and their registered Agents

Enabling employers to lodge and correct a payroll event to the ATO

Enables employers to report super contributions to the ATO in real time and

PSAR functionality

> Payroll Event Reporting/Full File

Replacement - enabling BMS to report

payroll data to the ATO Replacement

> Update Event - enabling BMS to adjust

payroll data

> myGov Employee Commencement allowing

individuals to onboard via MyGov

> Online display

> Remove W1 from BAS for large withholders

> Cancellation Service-enabling BMS to cancel

payroll data

> Pre-Fill-prefil ling IITRs based on STP data

> Super Contribution Reporting (On hold)

Future items

> ATO Officer printing/sending payment summaries

> BAS Pre-Fill-prefil ling the W1 and W2 labels based on STP data

> BAS changes for voluntary early payments

> Large Withholder Adjustment Form

A high level scope representation of the functionality to be delivered across the ATO June , September and December releases.

STP Services Schedule


DASHBOARD

June MST Publish Deploy to EVTE Comments

Payroll Event Reporting/Full File Replacement – enabling Business Management Software (BMS) to report payroll data to the ATO

8th Dec 16 23rd Feb 17 PUBLISHED • Data definitions published 3 March 2017 • Software developer guidelines published January 2017 • SWD guidelines update scheduled mid April

UNDER DEVELOPMENT

• Correction s framework

• Deep dive 10 April 2017 • End to end design session at DWG 12 April 2017

16th Mar 17 (XBRL style)

16th Mar 17 (XBRL style)

Apr 17 Draft classic XML style

Apr 17 Draft classic XML style

September MST Publish Deploy to EVTE Comments

Update Event – enabling BMS to adjust payroll data

June* June* • End to end design session at DWG 12 April 2017 • Draft Data definitions end of April • Software developer guidelines update of May 2017

Employee commencement via myGov – TFN declaration and Super Choice forms

June* June* • End to end design session at DWG 12 April 2017 • Draft Data definitions end of April 2017 • Software developer guidelines update of May 2017

December MST Publish Deploy to EVTE Comments

Cancellation Service – enabling BMS to cancel payroll data

Sept* Sept*

• Data Definitions (TBC Q3) • SWD guidelines update (TBC Q3)

Super Contribution Reporting TBC TBC • On hold pending design direction after the ‘fund to government reporting’ review.

*tentative

STP Pay event reporting

Payroll/

update

Super



D

i

s

p

l

a

y

Corrections

Framework

Employee

Commencement

D

i

s

p

l

a

y

Law

STP IT Schedule

How STP works


What do employers report under STP?

> Pref illed W1 and W2 on the activity statement for Small and Medium Withholders

> Large withholders no longer required to lodge BAS as W1 inf ormation already submitted

STP Payroll service

Prefilled income tax returns in myTax for self

preparers

Prefilled income tax returns via SBR/PLS for tax

agents.

Re

use

of

info

rmat

ion

C

urr

en

t tr

ansa

ctio

n

Employers/Intermediaries Employees/Intermediaries

SBR

ATO

> Employ er information > Employ ee information

> Pay ment information > TFN Declaration information

Payroll event

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

Employee Payment Summary

Employer Super

Guarantee TFN

Declaration W1 W2

Fin.


Payment Summary TFN Declaration

Employer experience


Employee experience


Employee experience cont.


STP Corrections Framework

Payroll/

update

Super



D

i

s

p

l

a

y

Corrections

Framework

Employee

Commencement

D

i

s

p

l

a

y

Law

STP IT Schedule

STP Corrections Framework – Agreed principles

Agreed principles

> The corrections framework should support current business payroll processes (where possible)

> Errors which relate to an employee‘s payroll should be reported in the following payroll event or via the “update

service”

> Errors which relate to an employer’s PAYG W liability and Gross payments should be able to be corrected in the

relevant BAS period and large withholding payment period

MATERIALITY THRESHOLD (numbers are yet to be finalised)

Where an error is discovered an employer can report the amount in the Business Activity Statement (BAS) for

the period in which the error was identified if under the following threshold:

Minimum $2k and maximum $50k or 0.5 of previous years withholding


STP Corrections Framework | Example 1 – Errors corrected prior to BAS due date


STP Corrections Framework | Example 2 – BAS lodged with correct liability


STP Corrections Framework | Example 3 – BAS lodged with incorrect liability


STP Employee Commencement

Payroll/

update

Super


Future


D

i

s

p

l

a

y

Corrections

Framework

Employee

Commencement

D

i

s

p

l

a

y

Law

STP IT Schedule

Supporting Employee Commencement

25

Policy Intent

Improving the efficiency of the superannuation system (reducing the

proliferation of multiple accounts & fees, better engagement in the choice

process).

Delivered by:

> myGov: people can find and consolidate superannuation accounts

easily, reducing fee duplication.

> SuperMatch2: automate and streamline existing processes for

account consolidation, reducing multiple fees.

> Pre-filled TFN and choice forms: will allow people to easily retain the

same superannuation account when starting a new job. http://budget.gov.au/2016-17/content/glossies/tax_super/downloads/Budget2016-17-Tax-Super.pdf

UNCLASSIFIED – STP Industry Engagement Forum

http://budget.gov.au/2016-17/content/glossies/tax_super/downloads/Budget2016-17-Tax-Super.pdf









Employee Commencement – Draft Design Principles

26

> The process should lead to an improvement in both the employee and employer experience when commencing a new

job, or updating their employment information.

> The process should improve the quality of data available to the employer for meeting payroll and superannuation

requirements.

> The process should make the employee commencement process more efficient

> The process should encourage active consideration of alternatives to the employer’s default fund.


Employee Commencement – Draft Design Principles cont.

27

> This exploration process should be fund agnostic – i.e. with no inherent bias to a particular fund or sector.

> Nevertheless, the process should not encourage the un-necessary proliferation of multiple member accounts (e.g. by

including avenues to facilitate consolidation of multiples by a member and the simple selection of an existing account

where desired).

> The process should avoid creation of ‘false’ choices (e.g. Fund not accepting contributions) which will only lead to re-

work/exceptions by employee and employer.


Employee Commencement Process

28 UNCLASSIFIED – STP Industry Engagement Forum

Employee Commencement Process – User experience


STP Superannuation Contributions reporting

Payroll/

update

Super



D

i

s

p

l

a

y

Corrections Employee

Commencement

D

i

s

p

l

a

y

Corrections

Framework

Law

STP IT Schedule

STP – Superannuation Contribution Reporting

34

> Single Touch Payroll requires an employer to report to the ATO:

- Superannuation Guarantee liability for an employee and/or Ordinary Time Earnings (OTE) at pay event

- Superannuation Guarantee paid for an employee at the time the contribution is made

> This information is used to support improved engagement by the ATO with employers, and to support improved

transparency of Superannuation Guarantee information for members

> We have been consulting on a design that would allow the ATO to receive contribution data sent to funds through

SuperStream. The Superannuation Industry have highlighted there are some challenges in this model including where

SuperStream is supported by a Channel B solution.

> We are looking at opportunities to receive notification of contributions from trustees, as part of a wider design change

in trustee reporting in support of improved member benefits and requirements stemming from the 2016 budget

measures. This design work has commenced with a specification due by June 2017.


Using STP super reporting

35

AT

O

Matched records will be

allocated to accounts.

SB

R

Contribution Transaction Report Data

> Employer information

> Employee information

> Superannuation contribution

Employer pays their staff’s

superannuation using their existing

SuperStream solution

Employee data will be

visible via ATO online

services

Matched STP and

SuperStream data will

be used to identify were

an employer may be

having difficulty meeting

their SG obligation

• BMS • Clearing

house • Fund portal

Fund

Member Contribution Report

> Payment to fund

> Contribution transaction report

> Retain existing error processes

Tailored messages to the

employer:

e.g. reminder to pay

Member Account Transaction Service

(MATS)

(Transaction Report for ATO)


Subject to f urther

design

Readiness for 1 July 2017

Payroll/

update

Super


Future Support and Readiness

D

i

s

p

l

a

y

Corrections Employee

Commencement

D

i

s

p

l

a

y

Corrections

Framework Super

Law

STP IT Schedule

STP Readiness Strategy

The purpose of this document is to provide an overview of the Single Touch Payroll (STP) Program Change Management

effort, its responsibilities and main objectives


Change Analyses

and Assessments

People Change

Management

Strategy

Inp

uts

Pla

ns a

nd

Im

ple

me

nta

tio

n

Stakeholder Engagement

Communications

Business Readiness

Compliance

Transition

Change Readiness Strategy

SWD Readiness

IT Systems readiness

Facilitated and managed transition of employers with 20 or more employees

STP readiness overview

Internal readiness

Post Go-Liv e Support Preparation Upskilling and

Readiness Maintenance Support

Raise awareness Get ready 1/7/18 required

Go-Live 1/7/17

Digital service providers ready for 1 July

Digital service providers ready post 1 July 17

DSP driven

early adopters

Communications to support activities and events, educational artefacts

Engagement and consultation activities leveraging DSPs, partnerships and industry champions

Communications to support raising awareness of STP

Engagement and consultation activities to raise awareness and test artefacts etc

Consultation & Legislative instrument Consultation & Legislative instrument Consultation & Legislative instrument

Exemptions capability in place

Support capability in place

2017

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Updated web content Updated web content Updated web content


Single Touch Payroll engagement principles

Put stakeholder engagement needs at

the heart of all we do (including channel,

timing and plain English).

Always base engagement on clear

evidence and data.

Provide accurate, tailored and timely

information so that stakeholders know

what they need to know and when.

We will leverage existing partnerships

and DSPs so stakeholders hear a

consistent message.

Collaborate and partner with DSPs

and key stakeholders through the

entire STP engagement process.

Learn and adapt our engagement

based on feedback and response.


How are we transitioning substantial employers


Enabling employers – Digital service providers

Digital Service

Providers

We are working in partnership with Digital Service Providers (DSPs) to support

and enable the transition of their business clients (employers).

DSPs are integral to the success of Single Touch Payroll solutions.

What we are doing

> engaging with the top 24 DSPs who cover the majority of substantial employers (79%)

> developing approaches as to how we engage with DSPs outside the top 24

> developing solutions to how we support and assist early adopters

> each DSPs who registers for Single Touch Payroll will be assigned an

account manager to support them through the process.


Influencing employers – Intermediaries

Intermediaries

We are working in partnership with intermediaries to support and influence the

transition of their business clients (employers and employees).

Intermediaries provide advice to their business clients and may provide payroll

services.

Intermediaries are a trusted communication channel.

We will partner intermediaries in their role as advocates for Single Touch

Payroll.

What we are doing

> we have identified a top 16 key agents as part of the Key Agent Program

> We have identified 23 industry and professional associations which cover

almost 100% of substantial employers

> we are developing an engagement approach to inform Government members

> we will use existing ATO channels to distribute information.


Helping employers to comply – ATO

ATO

The ATO will be engaging employers directly to inform them of their Single

Touch Payroll reporting obligations.

We will engage with substantial employers and consequently some small

employers (substantial: 20 or more employees; small: 19 or fewer employees).

We will work in collaboration with digital service providers and intermediaries

together as we support the transition of substantial employers by 1 July 2018.

What we are doing

> we will work closely with the top 103 employers with 10,000 + employees and allocate a relationship manager for support

> employers will be targeted with direct and tailored communications

> we will work through Single Touch Payroll forums and existing channels to

contact employers.


Supporting employers - Employees

Employees

Currently this is a low touch stakeholder group.

We will engage with them to support in education and awareness activities.

What we are doing

> Targeted participation opportunities for co-design and user testing

> Education and awareness


STP Communications


STP Go-live Support Model Stages

Business Readiness Activities

Go-Live

Internal resources upskilling (and sending

support material)

-2-3 weeks Pre Go-Live -1 weeks Pre Go-Live

ASM training

Internal team support + Post Go-liv e meetings (part time

~2hrs/day )

ASM Support

2 days Post Go-Live

Relationship Manager/ On-boarding Manager Support

(1-3 day s)

IT Service Desk Support

Technical Support

Post Go-Liv e Support Maintenance Support

3 day s

Post Go-liv e Meetings scheduled

Preparation Upskilling and Readiness

The outlined stages of the Go-Live Model are designed to meet the demand for initial support pending go-live and then when clients on

board. The completion of activities will be tracked and managed through allocated tasks within the STP project schedule.

Ongoing Softw are

Developer support Employ ers may ask questions in the following days/ weeks

depending on when they might first access STP

Pre/post go-live emails

Pre Go-liv e Meetings

Final Sof tware Dev eloper Support

Activ ities

Technical Hotline support for Clients

Software Developer Readiness Activities

SBR Support

Transition to Business ongoing Support


STP Overall Status – June Release


For more information, email

[email protected]

or visit

http://softwaredevelopers.ato.gov.au/STPupdate

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