Following through on plans to digitise and simplify tax reporting obligations for Australian businesses, the ATO recently confirmed that Single Touch Payroll – a system that requires a business to send employee payroll information when it does a pay run – will apply to every business that employs staff from July 1, 2019.
Since mid-2018, only businesses with 20 or more staff have been required to implement and use Single Touch Payroll (STP). However, the passing of the legislation in February now means a business with any number of employees needs to be using STP from July 1.
If it doesn’t use STP, it could face penalties for non-compliance.
Even though the change has been on the cards for almost a year, MYOB has recently reported less-than-impressive adoption rates. Lyndal Bowron, certified bookkeeper from RSM in Canberra, says it may be because employers aren’t aware of the changes, or believe it’s too complicated.
“There’s a perception that this is a massive change to be dealt with,” says Lyndal. “But the truth is, setting up Single Touch Payroll is a simple process. We’re encouraging business owners to set it up themselves, or ask their bookkeeper to set it up for them. Which option is best depends on whether they usually prepare their own BAS statements for the ATO, or have a bookkeeper or accountant do it for them.”
Lyndal says the major Cloud accounting software systems (such as Xero, MYOB and QuickBooks) already have the functionality to connect to STP. All the information to set it up is in the system, including steps to take and phone numbers to call.
“If you are unsure, the person or business listed as your registered tax agent can do it for you.”
In addition to meeting compliance obligations, there are a number of benefits to getting up and running with STP, including not having to prepare payment summaries at the end of each financial year.
“For businesses that have been using STP since the start of this financial year, they may not need to send out payment summaries to their employees after June 30, 2019. The payment summaries will be automatically provided to employees via their MyGov account.
“For the businesses that start using STP next financial year, having to do payment summaries will be a task of the past come 2020. It’s all part of the ATO’s plan to digitise tax reporting and make it simpler and more transparent, while protecting employee rights.”
Free STP seminar
RSM are running a free seminar on Single Touch Payroll on May 8 at their office in Deakin from 6 pm – 7 pm.
The seminar is an opportunity to learn:
- What STP is and how it affects you
- How to set up STP in Xero
- What to do if you don’t use these software systems
- How to avoid future issues when using STP
A representative from Xero will also be there to discuss STP and Xero, and provide first-hand information on setting it up.
If you are interested in attending the seminar, you can RSVP here.
For more information about STP, contact the team at RSM on 6217 0300.
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