While it is being reported that many businesses are not ready for Single Touch Payroll (STP) – one report suggests that 70% of small and medium-sized entities (SMEs) are not ready – employees of businesses that are operating STP face some changes.
For the first time, as a result of the introduction of STP, taxpayers may need a myGov account in order to get the payment summary details they need to complete their 2019 tax returns.
How taxpayers receive their payment summary or income statement from their employer depends on how their employer reports their income, tax and super information to the ATO. Taxpayers will be provided with either:
- an income statement via myGov – if an employer reports through STP, they are no longer required to give their employees a payment summary, instead this information will be made available to the employee through ATO online services via myGov and finalised by 31 July. The income statement will show the employee's year-to-date salary and wages, the tax that has been withheld and the reported amounts of the employer super. Income statement/s will be ready to use in tax returns when the employer marks it as "tax ready". Employers have until 31 July 2019 to do this but may do it earlier. A notification will be sent to an employee's myGov inbox when all of their income statements are tax ready. It is important that employees don't use any information that is not marked tax ready as their employer may finalise their income statement with different amounts, meaning they may have to amend their tax return. Once an employee's myGov account is set up and linked to ATO online services, they need to:
- log in to myGov using their email address or mobile phone number;
- select ATO online services; and
- select Employment and then view my Income statement; or
- a payment summary – if an employer is not yet reporting through STP, they will continue to provide employees with a payment summary by 14 July (as they do currently).
Employers need to let employees know if they won't be giving them a payment summary this year.
Employees with more than one employer may receive both a payment summary and an income statement. In that situation, employees will need to check that income from their payment summaries is included in their tax return.
This major change for 2019 will see many taxpayers needing to set up a myGov account and link it to the ATO. This is not necessarily a straightforward process – if taxpayers have a myGov account already linked to other services such as Centrelink or Medicare, adding the ATO can be problematic. For example, the name on the Centrelink account has to exactly match the name on ATO records – the ATO is likely to have a taxpayer's full name whereas a Centrelink account may only have first and last name. This may prevent the ATO from being added to a taxpayer's myGov account. The situation can be rectified but may require a trip to a Centrelink office.