STP Software Developer Guidelines
Version 1.2

Table of Contents

1Aim

2STP Scope

3The STP Story

3.1Timing and key events

3.2STP project principles

3.3STP benefits

4Payroll

4.1Key principles of the payroll event

4.2Who can submit payroll events?

4.3Journey Map: Payroll Event Reporting Process

5Co-Design and Release

5.1Software Developer Engagement Process and Publication Timelines

5.2Employer’s reported data assurance

6STP Release 1

6.1Payroll Event Taxonomy

6.2Payroll event messaging package

6.3Areas of Consideration

7Version Control

1Aim

This document will provide solution providers with an understandingof the core function of STP – the payroll event.

The payroll event allows businesses to report an employee’s salary and wage, PAYGW and super guarantee amountsto the ATO at the same time as they pay their employees.

This phase is the first part of an end to end system that when completed will make up STP.

2STP Scope

The above diagram represents the scope of STP from a business process perspective. The left hand side shows input services into an employer STP enabled business management system (BMS) encompassing commencement of new employees via a retail method (MyGov/ATO Online) and a wholesale method through an employer’s BMS.

The centre identifies the effected business processes, such as payroll, HR, commencement of new employees, business activity statement and payment summary annual reporting (PSAR).

The right identifies what the ATO will provide to employers and employees through the collection of information from the inputs and process outlined in the diagram above. These include end of financial year payment summaries, retail onboarding prefill, income tax return prefill, PAYGW information prefill for electronic BAS.

2.1Processes

2.1.1Payroll

The payroll event is described as the time when an employee is paid by their employer. An employer is expected to use the payroll service whenever they pay their employees; this means that the frequency aligns with the businesses natural payroll cycle. The payroll event will be utilised for employers to support mandatory reporting of PAYG Withholding. In addition employers must report either Super Guarantee amount or Ordinary Time Earnings (OTE) amounts.

2.1.2Commencement of new employees

The commencement of new employees is seen as part of a business HR process. The retail method includes the ability for a new employee to provide a tax file number declaration, choice of their nominated super fund, PAYG withholding voluntary agreement and upward variation electronically through MyGov/ATO Online. This service provides an employer with the ability to pull the information directly from the ATO. The wholesale method enables an employer to send a tax file declaration directly to the ATO using their BMS.

The following forms are included in the commencement of a new employee services:

  • Retail Method
  • tax file number (TFN) declaration (NAT 3092)
  • superannuation standard choice form (NAT 13080)
  • PAYG withholding – voluntary agreements (NAT 2772)
  • Withholding declaration – Upward Variation Only (NAT 3093)
  • Wholesale Method
  • tax file number (TFN) declaration (NAT 3092)

2.1.3BAS

In STP employers will continue to utilise the current BAS process to report PAYG withholding amounts. The ATO will be undertaking a co-design process with business to identify opportunities to utilise STP data to streamline the BAS completion process.

2.1.4Payment summary annual return

Through STP the payment summary annual return process is a combination of the payroll event process and the provision of the end of financial year non-payroll data through adjustment services. The adjustment services are currently in design and detail will be provided in a future version of this document.

STP will allow the ATO to provide the following payment summaries on behalf of the employer:

  • PAYG payment summary – individual non-business (NAT 0046)
  • PAYG payment summary – foreign employment (NAT 73297)
  • PAYG payment summary – employment termination payment (NAT 70868)
  • PAYG payment summary – business and personal services income (NAT 72545)
  • Non-persona; service income components only.

To facilitate this, the ATO will require the reporting of data through the Australian Standard Business Reporting framework. This data will include:

  • Payroll Event Data (see Business Payroll Taxonomy) as part of a business’s natural payroll process and cycle.
  • Adjustment Event Data (Taxonomy in Development) to provide EOFY non payroll specific data for the above payment summaries.

At present the following will NOT be included in STP:

  • PAYG payment summary – superannuation lump sum (NAT 70947)
  • PAYG payment summary – superannuation income stream (NAT 70987)
  • PAYG payment summary – withholding where ABN not quoted (NAT 3283)
  • Employee share schemes

2.1.5Superannuation Reporting

The collection of superannuation contribution data via STP will enable the ATO to provide an improved level of assurance that employers are meeting their Super Guarantee obligations.

Whilst the design supporting Superannuation Reporting is yet to be finalised, it is expected that it will reuse the data created by employers to support Superannuation contributions sent using the existing SuperStream standard.

3The STP Story

On 21st December 2015, the government announced business reporting of PAYG withholding tax and superannuation will be simplified with the implementation of Single Touch Payroll (STP).

The STP initiative supports the Government’s Digital Transformation Agenda, designed to drive innovation and make it easier for individuals and businesses to access government services.

Under STP, information will be reported to the ATO by employers or their service provider through Standard Business Reporting (SBR) enabled software.This will involve the reporting of employee payroll information to the ATO when employees are paid.

Employers will also have the option to pay their PAYG withholding and Superannuation obligations at the same time they pay their employees.

Payment of superannuation contributions by employers will also be reported to the ATO when they are made to the employees’ super funds.

In addition, STP will include processes associated with bringing on new employees by providing digital services for completion of forms such as tax file number (TFN) declarations and superannuation standard choice forms.

The ATO is continuing to engage with employers, their service providers, the superannuation industry, Tax Practitioners and BAS agents to help prepare for the proposed Single Touch Payroll reporting changes. These guidelines form another significant step along this journey.

3.1Timing and key events

  • In late 2016/early 2017,a small businesssimulated pilotwill seek to explore and confirm benefits of STP for those employers with 19 or less employees.
  • From April 2017, early adopter/production testing of STP.
  • From 1 July 2017, STP available for employers with a certified STP solution to report on payroll event and offer new employee commencement process. For more information on certification see section 5.2.
  • From 1 July 2017, STP available for reporters to report superannuation contributions when they are paid.
  • 1 July 2018, employers with 20 or more employees required to use STP (subject to successful passage of legislation).

Importantly, the ATO’s non-production simulation pilot establishes the groundwork for a phased and controlled transition approach leading to 1 July 2017 and beyond for all businesses.

3.2STP project principles

  • Make use of the natural payroll event and online payment channel systems for STP Reporting.
  • Seek to drive positive behavioural change and good business practices rather than compliance-driven change.
  • Find low or no touch impacts for employers where possible.
  • Ensure there are no barriers to participation regardless of business size or scenario.
  • Facilitatemarket customisation and tailoring of solutions.
  • Use trusted business partners to identify solutions and develop implementation approach.
  • Leverage existing SuperStream implementations where it makes sense and encourages innovation.
  • Phase one provides a building block for potential future phases to minimise re-work and enable incremental changes over time.
  • Start simple and iterate through gradually adding complexity.

3.3STP benefits

  • Employees will be able to see their total YTD salary and wage income, PAYG withholding amounts and super guarantee contribution amounts as they accumulate.
  • STP ensures all employers are participating in the PAYG withholding and Super Guarantee systems equally and provides greater visibility over obligations.
  • With earlier warning, the ATO will be able to better help employers struggling to meet their PAYG withholding and super obligations.
  • Employers will use their normal business processes to meet their PAYG withholding reporting obligations as this will happen at the same time they pay their employees.
  • Streamlining of employee commencement processes as TFN declarations and choice of super form can be completed either via pre-fill in myGov or through the employer’s BMS.
  • The pilot will explore and confirm benefits of STP for those employers with 19 or fewer employees.

4Payroll

Payroll Event signifies the amount that has been paid out to employees for the services they have done for the organization within a certain period of time. It is the combination of the financial records of their employees' salaries, wages, allowances and deductions.

4.1Key principles of the payroll event

The payroll event is the foundation of STP. An employer will be able to easily meet their PAYG withholding reporting obligations as this will happen automatically when they pay their employees.

Other key principles include:

  • Employer-provided data is the source of truth
  • STP payroll reporting is aligned to the employee payment cycle
  • Payroll event data is made up of employer and individual employee data
  • Provide a new channel for employees to see their information throughout the year and prefill their income tax returns

4.2Who can submit payroll events?

4.2.1Employers (self-submitting)

Employers will be able to submit payroll events to the ATO via BMS or cloud provided software.

4.2.2Intermediaries

An intermediary is a BAS agent, tax agent or payroll provider registered with the Tax Practitioners Board.

4.3Journey Map: Payroll Event Reporting Process

The following design proposal illustrates what an employer would experience when paying employees with an STP-enabled solution.

4.4Design Features

Employer BMS or other chosen STP solution is the source of truth. The ATO will only hold information and not aggregate.

Year to date totals are included and are required as part of a payroll event. Payment period and payment date is also included. The business payroll taxonomy outlines the mandatory and optional elements as well as contextualisation and groupings.

Changes and adjustment to payroll event information is typically carried out through future payroll events but can be done through a complete payroll event file replacement (Full File Replacement)

Standard Business Reporting channels will be used to transfer data in STP.

Employers can make PAYG Withholding payments to the ATO more frequently if they choose, through the existing payment process.

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5Co-Design and Release

We will be taking a phased approach to releasing the STP information and guidelines. This will ensure that we consult with you on each part and then collectively refine as we go.

We are also taking a flexible approach to the sequencing and release of these services. Once we’ve completed the co-design process we will have worked with you to develop a full end to end system that maximises the use of employers’ natural business systems.

Iterative release of STP services for consultation

The first phase will cover the payroll event service. The other services will follow as detailed in the diagram above.

5.1Software Developer Engagement Process and Publication Timelines

5.1.1Process for release of technical documents:

The following table identifies the steps, activities and timing for the rollout for each technical document.

Process Step / Activities to deliver release / Timing
  1. Select external review group(s)
/ –invitation sent to review group
–identify group make-up
  1. Review
/ –documents provided via email to review group
–reaction
–right level of context
–is it what you expected
–any surprises
–right content to give feedback on / 3 days
  1. Amend
/ –develop next iteration of technical documents
–if required, schedule meeting with external reviewers to clarify comments
–communicate status update / 2 days
  1. Publish
/ –documents published to wider industry community for comments
–request feedback
–general communique to wider industry group via newsletter / Two weeks*
  1. Consolidate
/ –design team to collate feedback and update as required / Two weeks
  1. Workshop
/ –Establish technical working group to progress and resolve outstanding issues
–communicate status update
  1. Amend
/ –update documents with feedback received
– date to be determined after the workshop / One week
  1. Finalise draft
/ week starting
–publish final draft technical document
–publish via the newsletter and softwaredevelopers.ato.gov.au
–promote publication of document at key forums.
–consider direct email to feedback providers
– date to be determined after the workshop / One week

* Due to the tight timeframes as a result of end of financial year processing, the payroll event publish process will be extended by a further 2 weeks.

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5.1.2Rolling Schedule of release of technical documents

Based on the process for release of technical documents - the timelines below portray each step and associated timeframe for completion. We acknowledge this falls in one of the busiest times of the year and thank you in advance for your support.

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5.2Software Certification

From 1 July 2017, STP available for employers with a certified STP solution to report on payroll event and offer new employee commencement process. This certification is currently in design.

5.3Employer’s reported data assurance

The ATO data will be constantly replaced by the submission from the employer, hence the data will be identical. TheATO position is based on the idea that employer’s reported data is the source of truthand will not be aggregated; making it unlikelythat there will be any misalignment in data between employer and ATO systems.

As the provided data is the source of truth, we don’t expect that there will be any need for reconciliation between the business management software (BMS) and the ATO.

6STP Release 1

6.1Payroll Event Taxonomy

This document outlinesmessage design represented within service MIG packages and ATO internal form services.

For ease of compliance for software provider industry, the STP service will follow the same technical rules and constraints as the current ebMS3 SBR2 channel environment. The elements within this build are defined by the Standard Business Reporting (SBR) definition held in the Australian Reporting Dictionary.

The contents of the payroll event taxonomy may change as a result of our industry consultation and co-design with you.

The Business Payroll Taxonomy document identifies the data requirements for a payroll event within the STP ecosystem. The taxonomy outlines the groupings, relationships and options of all data elements related to thepayroll event.

This document will contain columns for the following:

Heading / Definition
DATA GROUPING / Defines the group level the data element is associated to.
SEQ / Sequence number- ATO STP Design Internal numbering sequence.
SBR TREF / SBR Data Dictionary Taxonomy Reference number associated to an element. Any elements without this reference are not available in the SBR Data Dictionary.
SBR DATA LABEL / SBR Data Dictionary name of the elements.
ATO Report Label / ATO business language name of the element.
SBR BUSINESS DEFINITION / Element definition as provided by the SBR Data Dictionary.
SBR LOADED / Notes whether the element is currently contained within the SBRData Dictionary.
STP Service /
UI Map / ATO internal mapping of taxonomy element to system wireframes.
Element Required / Denotes whether a field is mandatory within the taxonomy.
MSG Context Rules / Defines how the element is contextualised within the message, for ATO consumption.
Repeat Count / Defines the number of times this element can be repeating in a single message.
Last Modified / Version the element was last modified.
ATO Linked Product / Lists all ATO electronic forms the element is currently associated with, as per the SBR library.
Data Matching / Relation Linking / Denotes that the element will be used for Data Matching / Relation Linking.
ICP Account Processing / Denotes that the element will be used for ICP Account Processing.
ATO Online / Denotes that the element will be used for ATO Online.
PSAR Generation / Denotes that the element will be used for PSAR Generation.
IITR Pre-Fill / Denotes that the element will be used for IITR Pre-Fill.

6.1.1Data Grouping

The business taxonomy for payroll assembles elements into the following data groupings:

  • Employer / Supplier Organisation: Information about the entity sending the payroll event Entity sending payroll event.Consists of – Employer ABN, Name, Address, contact details
  • Employee / Payee: Information about the Person receiving the pay. Consists of – Employee TFN, Payroll ID, Address, contact details
  • Payroll Run: Information about the payroll event. Consists of – Period dates, Pay date, Transaction ID
  • Taxation Item: Information about tax paid. Consists of – PAYGW amount and Foreign Tax paid
  • Wage Item: Information about earnings.Consists of – Gross payment amount, Lump Sum amounts, Termination payment amounts, Labour Hire gross payment
  • Super Entitlement: Information regarding Super Guarantee Amounts and OTE Amounts.
  • Payslip: Consists of – Employee net income and reportable benefits (RFBA)
  • Allowance Item: Information about allowances. Consists of - taxable allowance amounts and allowance types
  • Deduction Item: Information about deductions.Consists of – deduction amounts and deduction types
  • Declaration: The standard ATO electronic legal declaration components, to allow electronic signature against each payroll report submitted.

6.1.2MSG Context Rules

The Message Context Rules define how the element iscontextualised inthe message for ATO use.