Melanie Zander takes us through the basics and most important parts of Single Touch Payroll.
Legislation to extend single touch payroll (STP) reporting to businesses with less than 19 employees will come into effect on 1 July, which gives hundreds of thousands of businesses just five months to get on board.
Remember that STP is already live for businesses with 20 plus employees.
Here’s everything you need to know about what’s going on.
What is single touch payroll?
Single touch payroll is also called real-time payroll reporting — because it means every time a business pays their workers all salary information is sent to the ATO. This includes wages, deductions and super information, eliminating the need for Pay-As-You-Go withholding activity statements throughout the year.
This real-time reporting is generally done through accounting software platforms.
Why is this happening?
Basically, because it makes black economy activity harder, because the ATO has a better idea of who is being paid what, and when.
What are the concerns?
There’s no shortage of concerns about the extension of STP reporting to smaller employers.
Worries range from businesses not being aware of the changes, to micro-employers (four or fewer workers) not having digital payroll software or access to reliable internet.
For those that can get digital payroll software, it will come at a cost. A micro-business that does payroll manually will find STP difficult.
How will it work?
For businesses with digital payroll software, enabling STP reporting can be as easy as a few clicks.
For those without it, the ATO has said it won’t be forcing anyone to get it, although they have strongly implied businesses should.
Businesses without digital software will need to comply with the new regime through business activity statement filings, submitted to the ATO. To make this easier, the ATO has said micro-businesses will only have to submit STP reports quarterly for the first few years.
If you want to take the hassle out of paying staff with a seamless and secure payroll solution that is STP compliant look at an online solution. Also consider one with an integrated payroll solution that comes with easy to use rostering, timesheets, expense management and inbuilt awards.
Communicate with staff
Don’t assume your staff know about the new changes in reporting. Provide them with an information sheet on what the changes are (The ATO have a simple fact sheet just for employees).
The key message to employees is that every Australian who is an employee needs to create a myGov account. Explain to them that Payment Summaries will now be available to them via their myGov account as well as other information that is available to them like amounts paid for superannuation.
As an employer you’ll no longer need to issue annual payment summaries to employees once you have opted to lodge under STP.