To find out if you are a substantial employer, count the employees on your payroll on 1 April 2018. You can do the headcount after 1 April 2018, but the count must reflect the number of employees who were on your payroll on 1 April 2018. 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. You don't need to send the headcount to the ATO, but you should keep a copy of the count for your records.
You will be exempt from reporting under STP for the 2018 financial year if you:
- had fewer than 20 employees for at least 10 out of the preceding 12 months; and
- reasonably expect to have fewer than 20 employees for at least 10 out of the immediately following 12 months.
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.
HOW TO COUNT YOUR EMPLOYEES
Include in the headcount, full-time employees, part-time employees, casual employees, employees based overseas, any employee absent on leave (paid or unpaid) and seasonal workers who are on your payroll on 1 April 2018 and worked any time during March 2018. There are exemptions to counting seasonal workers who were employed for a short-time only.
Don't include in the headcount any employees who ceased work before 1 April 2018, casual employees who did not work in March 2018, independent contractors, staff provided by a third-party labour hire organisation, company directors, office holders and religious practitioners. Directors, office holders and religious practitioners 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.
STP CHECKLIST
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 email or newsletter.
Connect with the ATO
- Subscribe to their updates and keep up-to-date with news and events.
- Make sure the ATO has the right contact details for your business or organisation.
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?
Apply for more time if you need it
- If your software will be ready, but you won’t, you will need to apply to the ATO 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. The ATO only provide deferrals for extenuating circumstances.