Single Touch Payroll
On Tuesday morning, without much fan fare, the extension of Single Touch Payroll Reporting to include employers with 1 – 19 employees passed in the House of Representatives. Although STP has been in place for employers with 20 or more employees since 1 July 2018, this week’s update is expected to result in significant change for small businesses. Here we break down what exactly that means to you.
What is Single Touch Payroll?
Single Touch Payroll (STP) is the reporting of payroll and superannuation information directly to the ATO each time a pay run is processed.
When does STP start?
STP for employers with 20 or more employees was required as of 1 July 2018. For employers with 19 or less employees, STP will be required as of 1 July 2019. However, many payroll software solutions already have this function, so you can setup and start reporting via STP immediately.
Does this impact me as an employee?
As an employee there is minimal change that you will see. At the end of the financial year your employer may not issue you a group certificate, as the ATO will already have all the data. As your tax agent we will also be able to access this information when assisting with the preparation of your tax return.
You will also be able to access to payroll information submitted by your employer via the myGov website.
What does this mean for me as an employer?
As an employer, from July 1 you will be required to submit payroll information to the ATO when your process a pay run.
If you already have payroll software in Xero, MYOB or other certain software you are only a step away from meeting the compliance requirements. We are happy to assist you with this step if required.
If you don’t already have payroll software, for example using a cashbook or spreadsheet for payroll, this will need to be looked at. Given that many of the solutions have not been released as yet, we are continuing to research options for you and will be able to provide recommendations as software is released.
If you would like to discuss payroll software or fully inclusive accounting programs, we would love to discuss your options with you.
Can I opt out?
Although the ATO may agree to deferral in the transition period, STP is a compliance requirement that is not optional.
Are there any benefits for me as an employer?
As the ATO is receiving the information from you in real time, they will no longer require annual payment summaries to be lodged at the end of the year.
In addition, when completing your BAS’s, the data for W1 (total wages paid) and W2 (PAYG Withholding) will be prepopulated by the ATO.
What should I do next?
We have already begun researching the best payroll solutions for you and your business. Over the next few months as new software is released we will provide a number of recommendations for your business, and can help you get set up in time for July 1.
For Banklink clients, given that you may be required to choose a new payroll solution, it might be worth considering looking at new accounting software at the same time. We will not force you in this direction, however, we are happy to give advice and assist with the transition should you move in this direction.
If you know exactly what software you would like to transition to, feel free to have a chat with us. We are Xero and MYOB partners, and we also have experience with various other software solutions.
If you are a concerned or uncertain about this change contact us today and we would love to have a discussion with you.
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