Single Touch Payroll is the most significant procedural change for businesses since the introduction of GST in 2000. Now is the time to get prepared!
Single Touch Payroll (STP) is a system to streamline payroll by reporting employees’ salary, PAYG Withholding and superannuation guarantee directly to the ATO each payday.
Legislation, which has recently been passed, will come in effect 1 July 2019 for businesses with less than 20 employees. Employees with more than 20 employees have been required to be STP compliant since 1 July 2018.
The aim of this reporting requirement is to simplify the year-end process of submitting annual payment summaries and provide employees and the ATO with real-time information. It is also intended to reduce the need to have new employees complete paper TFN declarations and Super Choice forms. These forms will be able to be completed on-line.
If you currently use the latest version of a computerised payroll program, which will likely be a function of your accounting program, the STP process should not be difficult to implement. That is, if you use a cloud based version of programs such as MYOB, Reckon, Xero or Quickbooks Intuit the STP system is likely to have been catered for in that program. Please check with your software provider, or contact us to confirm.
If you do not use an STP compliant version of the program, or if you use a manual payroll system, then you will need to make changes.
The ATO has indicated that it will provide some leeway for “micro-employers” (l1-4 employees) who fail to implement the system by 1 July 2019 and have suggested that they will allow up to 3 months to have your systems in place. You won’t be forced to purchase payroll software if you do not currently use it however there are distinct advantages in having an STP compliant payroll system. There are low cost software programs available. Once you have a STP compliant payroll program you will also need to ensure you have an AUSkey installed on your computer. This will enable you to link your payroll software with your AUSkey and report directly to the ATO.
STP reporting will place a greater onus on employers to ensure PAYG withholding and superannuation guarantee obligations are paid on time. Data matching with superannuation funds will identify will identify employers who are not meeting their obligations.
What you need to do to prepare:
If you use the services of a bookkeeper or a BAS agent we suggest you speak to them to confirm your payroll program is STP compliant.
If you attend to your bookkeeping yourself then you will need to ensure the version of the program you use is STP compliant. (If you need to upgrade your program we suggest you move to a cloud accounting program).
There are a number of low cost software options available, we can provide guidance on which one best suits your circumstances.
Establish systems to ensure compulsory superannuation guarantee payments are made in time (employees’ superannuation funds need to receive payments by the due date).
Single Touch Payroll is the most significant procedural change for businesses since the introduction of GST in 2000. Now is the time to ensure you are ready, please contact our office and our team can guide you through this change.