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Australia introduced real time payroll reporting from 1 July 2018, similar to other jurisdictions around the world. Known as Single Touch Payroll (STP), each pay event must be reported to the Australian Taxation Office (ATO) on the day of payment, providing the ATO with real-time visibility over the accuracy and timeliness of organisations’ payroll processes.

The ATO previously announced an exemption from STP reporting for a certain class of globally mobile employees who are inbound to Australia until 30 June 2019. The ATO now has released its final position on how STP will apply to inbound assignees who are paid from a foreign payroll. From 1 July 2019, employers will be required to report such employees in an STP event report each pay period, with an automatic reporting deferral until the last day of the next calendar month after the foreign pay day. A finalisation declaration is required at the end of the financial year to confirm the amounts paid to the employee for the full financial year (July to June).

An extension of time will be provided in respect of foreign employees for this declaration. STP will not apply to employees with a temporary presence in Australia who have been granted a PAYG withholding variation to nil. In these situations, the reporting requirements stated in the variation to nil will continue to apply (i.e., a statement of earnings to each employee at the end of the financial year).

Please see the full Insight for further details.