Single Touch Payroll Update
Single Touch Payroll (STP) was introduced on 1st July 2018 for all businesses with 20 or more staff (substantial employers). The Bill has officially been passed by the Government and STP is set to be rolled out in stages to smaller organisations with less than 20 employees as at 1 July 2019.
Whilst there are still elements of the STP rollout for smaller organisations that need to be defined by the ATO, what is clear is that you need to be aware of what STP is, and what it will mean for you into the future.
What do you need to know?
STP will require you to have your payroll transaction data reported to the ATO each time your employees are paid. This may require you to use a software solution that will transmit the data to and from the ATO on your behalf (for example, Xero)
This payroll or reporting system must be STP Compliant, so that each pay cycle you can report the following items to the ATO:
- each employee’s name and tax file number (TFN)
- gross amount paid
- tax withheld on the gross
- ordinary time earnings for the period, and
- any superannuation guarantee obligations.
The ATO will then report to you each month or quarter the correct amount of PAYG tax withheld to pay in your activity statement. Also, each quarter there will be information available regarding your superannuation obligations to either pay the ATO clearing house or your independent provider.
As part of the new regime, the reports and liabilities owing will be available to you in real time. This means that, if you wish, you will be allowed to make payments towards PAYG tax withheld and superannuation contributions in your pay cycle before the due date.
What you need to do?
If you are already using an accounting software solution you will need to make sure this is (or will be) STP compliant come 1 July 2019.
If you aren’t currently using an accounting solution it is now time to discuss your options and review your internal processes. We would love to go through this with you and show you how an accounting solution, like Xero, can streamline your business and allow a more efficient way of processing payroll and compliance reports. Best of all, Xero will save you time, allowing you more time to enhance your business.
Our advice is to become STP ready to avoid any fines or penalties in the future from the ATO.
To get your business ready for Single Touch Payroll, we’d love to chat about using an online accounting software solutions like Xero.
We are here to help you through the process if you need it. Please do not hesitate to contact our office for support on 08 9754 4144.
