Commencement of a new employee

FROM:

SINGLE TOUCH PAYROLL ‘PAYROLL REPORTING’ BUSINESS IMPLEMENTATION GUIDE (SINGLE TOUCH PAYROLL BIG)

Page 40

3.5 Commencement of a new employee

On commencement of a new employee, an employer will need to report the commencement date and a TFN declaration to the ATO. The pay event includes information from the TFN declaration form.

Employers may use the following methods to meet their obligation to report TFN declaration information:

1. Existing electronic TFN declaration services/channels – SBR and Business Portal

a. If existing processes are used to report TFN declaration, the employee withholding detail fields do not need to be included in the pay event.

2. TFN declaration in a pay event including the employee declaration.

3. Paper.

3.5.1 Commencement date

The business rules for commencement of a new employee are:

1. If the employer captures the commencement date the commencement date must be reported.

2. If the employee is rehired using the same payroll id the rehire commencement date should be reported.

a. If the employee was terminated and rehired in the same reporting period, using the same payroll ID, the rehire commencement date should not be reported.

b. If the employee was terminated and rehired under a different ABN /branch within the same group in the same reporting period, the commencement date does not have to be reported.

3.5.2 TFN declaration in pay event (Phase 1 only)

The pay event includes employee withholding details labels, which replicate information provided to an employer on a TFN declaration.

The business rules define how an employer can meet their obligation to provide the TFN declaration to the ATO, with the next STP event for that employee. Additionally, the employer can meet their obligation to notify the ATO that they have not received a TFN declaration.

The business rules for TFN declaration in pay event are:

1. An employer who provides a TFN declaration through a pay event has met their obligation to report a TFN declaration to the ATO.

2. Employers may choose to include employee withholding details in a pay event. Where the employee’s declaration is not provided this does not constitute a TFN declaration.

3. Employers cannot include employee withholding section in an update event.

4. An employer may wait until the next pay event to send the TFN declaration after they receive it from the employee, or if notified that the employee will not provide the TFN declaration.

a. If the employee is not paid within 14 days of the employer receiving a TFN declaration an automatic deferral will be granted until the next pay day for that employee.

5. Employers must include details of an employee’s declaration when submitting a TFN declaration through the pay event.

a. Outcomes from ATO validation of the TFN declaration, such as unmatched and incorrect TFN, will follow the existing process for correspondence to be sent to the employer and the employee.

6. Employers may continue to report employee withholding details in subsequent pay events. The employee’s declaration is not mandatory in this case as it is only required for a TFN declaration.

a. Where changes occur to employee details and the employee does not provide a TFN declaration, the change is not required to be reported. For example, when an employee changes from part time to full time employment there is no requirement to report via STP.