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Trigger
Government has defined that services should be provided as Digital by Default. Government has set a
target that “all major services and interactions” from the federal sector will be publicly accessible online.
Both government and business would like to reduce the red tape burden of compliance.
ATO Initiative
The Australian Taxation Office has launched its Reinventing ATO blueprint, identifying how it will
transition to provide the future experience in the tax and super systems. This has been in response to
detailed consultation from business and the community about what people wanted from the ATO.
ATO are changing the way they work in response to community expectations.
Tax and Super Systems
Employers are obliged to report and pay Pay As You Go Withholding (PAYGW) to the ATO and
Superannuation to employee super funds. These obligations have a very high administrative burden on
business.
The SuperStream initiative has been introduced that requires employers to align both payment and
reported data to super funds in a specific electronic format. This initiative is in its early stages of
operation and has planned future enhancements scheduled.
Employers have been reporting annual employee Group Certificates/Payment Summaries to the ATO
since WWII. Businesses also have to report BAS details to the ATO on a regular basis. The Single Touch
Payroll (STP) initiative is designed to take advantage of existing standard business processes to align
reporting of employment related PAYGW and super obligations.
This will include 3 key business processes:
1. On-boarding – when employees accept employment offers, they must provide Tax File Number
(TFN) Declaration and Choice of Superannuation Fund (COS) details to the employer who then
must report the details to the ATO and super funds.
2. Employee Pay Event – employers regularly pay their employees but report annually for Payment
Summaries and monthly/quarterly for BAS.
3. Pay Obligations – PAYGW to ATO and super to super funds on multiple frequencies.
STP will use these key processes to enable employer reporting to the ATO for:
1) On-boarding – electronic capture and submission of employee identity, TFN Declaration and
COS details.
2) Pay Event – electronic reporting of employment and earnings details.
3) Payment Obligations – out of scope of STP initiative.
It is intended that using these existing business processes to trigger electronic reporting to the ATO will
replace the current multiple timing and format of business reporting to the ATO.
A key benefit of STP will be information sharing within government to reduce multiple employment
reporting obligations. For example, the Department of Human Services will use the reported data to
better inform social security payments. Many other agencies have also identified efficiencies by using this
data.

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Details of STP Initiative
The timing and details of the proposed STP reporting obligations are currently the topic of intense
consultation between government and the community. Details will be provided in further briefings as this
initiative progresses.
Role of Pendragon Consultants
Pendragon Consultants are a member of the Australian Business Software Industry Association (ABSIA),
that also has members from the payroll and accounting software companies. Our representative, Deanne
Windsor, is also on the board of directors of ABSIA and is one of the two ABSIA directors charged with
representing their members in government consultation on STP.
The payroll software developers for products used by this audience are members of ABSIA and may also
be on the ATO STP Working Group (STPWG). Regardless of their role in the working group, all ABSIA
members are kept up to date on this initiative, as they are tasked with the responsibility for ensuring
their payroll products and services comply with legislation.
What is the Current Status of STP?
ATO undertook detailed consultation with ABSIA and Software Developers (SWD) last year, along with
many other stakeholder groups. In November 2015, ATO provided Treasury with a briefing on the STP
initiative in order for Treasury to brief the Government and thus form policy and legislation to support
the STP initiative.
However, Treasury have asked ATO to extend its consultation to better inform the legislative
framework. A new STPWG has been formed and will commence detailed consultation in April 2016.
As Pendragon Consultants are on that working group, we will keep you updated on progress.