Budget 2019: Government flags expanded single touch payroll regime to aid welfare crackdown

tax office

The government has proposed expanding the single touch payroll (STP) reporting regime to enable more data to be collected for use by the tax office and other Commonwealth agencies.

The STP data set would be expanded to include “more information about gross pay amounts and other details”.

Departmental officials were unable to confirm on Tuesday what details will be included in the $82.4 million expansion, however, the government says the measure will “reduce the compliance burden on employers” who report figures to multiple government agencies.

Officials did confirm the details would not include figures not already available to business owners.

The measure was included in the 2019-20 budget alongside a plan to save $2.1 billion over five years by automating reporting of employment income for social security purposes.

From July 1, 2020, those on income support who are employed will report that income each fortnight rather than calculating and reporting earnings.

The Department of Human Services will receive the STP data from the ATO, effectively reducing the likelihood that support recipients will be overpaid by the government.

The measures would affect business owners employing workers who derive part of their income from government assistance.

It comes amid a broad-based push in the taxation community to get more than 700,000 businesses with fewer than 20 workers to sign up to the STP reporting regime by July 1 this year.

There has been concern for micro-employers, in particular, who aren’t already using digital payroll software and would be unable to comply with the new reporting requirements.

The ATO has, however, stated previously it intends to apply a soft enforcement approach in the 12 months proceeding the official compliance date later this year.

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