For large withholders, the total salary and wages amount recorded at label W1 on a Business Activity Statement (BAS) is not used for the purposes of any calculations within the BAS. However, conducting the calculations required in order to complete this label can be administratively burdensome. Propose that the requirement to complete this label be removed for large withholders.
This idea was submitted to the Board prior to the launch of Sounding Board. The Board understands that label W1 has no impact on payment liabilities. It is used for statistical and compliance purposes but is unreliable as many clients fail to complete it correctly, or in some cases, at all. The idea has been referred to the ATO for implementation.
19/07/2016
The ATO has advised that this suggestion is being progressed through its Single Touch Payroll initiative (STP) which will remove the requirement to report labels W1 and W2 on the BAS once fully introduced. STP will also deliver further benefits by allowing for more regular reporting of Pay As you Go Withholding and superannuation contributions for payments made to superannuation funds and it also supports the work that the ATO is progressing in simplifying the BAS for businesses to improve their experience.
Currently, STP is intended to be phased in as follows:
• from July 2017, any business with STP enabled software can commence STP reporting, with the option to make voluntary payments; and
• from 1 July 2018, employers with 20 or more employees will be required to use STP enabled software for reporting to the ATO.
A pilot is being conducted early in 2017 focused on small employers, to identify and verify the benefits for small business.