In September 2016, the government passed legislation introducing Single Touch Payroll. The system is due to commence on 1 July 2018 for employers who have 20 or more employees as of 1 April 2018.

For employers with less than 20 employees, Single Touch Payroll will be optional until 1 July 2019.

It should be noted that it is actual employees which are counted and not what represents a Full Time Equivalent so part-time and casual employees will represent an employee for these purposes.

Single Touch Payroll is essentially "real-time" reporting for payroll and PAYG Withholding and requires employers to report to the ATO each pay cycle rather than at the end of each quarter or month.   This information will then be used to pre-fill Business Activity Statements at the W1 and W2 labels each month/quarter.

Therefore, if employers do not have accurate or up-to-date payroll systems then now is a good time to start thinking about it as there is only 8 months to implement a new system.  In addition, it will be quite simple for any errors to be identified by the ATO once the system is up and running.

For those who use up-to-date software with a payroll module, this function will generally be incorporated into their existing software by their provider but those who are still using manual systems or older software will need to consider their options as to how to become compliant