Single touch payroll will change the way businesses report salary/wages, PAYG withholding and superannuation information to the Australian Taxation Office. What is Single touch payroll and how big is the change?
STP is a new regulation that changes when and how small businesses report payroll activity to the Australian Taxation Office (ATO).
Businesses used to report this information to the ATO once a year. Now, they need to send a report after each pay day. Reports must be submitted digitally, using a specific format. STP is a significant change that will require many employers to upgrade or replace their payroll system in order to meet new payroll reporting obligations.
If your business is not using STP compliant software you will need to upgrade or use compliant software and 1 July 2019 is not that far away.
Small businesses will need to submit the information online, using a specific format known as SBR (Standard Business Reporting). Depending on how you do payroll now, you may need to change software or find a service provider who can produce compliant reports for you.
To be ready for the switch, you'll need to make sure you can submit compliant reports every payday.
If you use online payroll software, it should be able to handle the job. Just make sure it produces ATO-compliant reports. See table below.
If you use desktop payroll software, you'll need to find a service that can upload your payroll reports, convert them into the ATO's required format and submit them on your behalf.
If you use spreadsheets or pen and paper, you'll need to find a service to convert the data into a compliant digital report format and submit it on your behalf.
If you are a micro employer (1-4 employees) the ATO said they will offer an alternative option to help with the transition to STP - allowing those who rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each time payroll is run.
The ATO has talked with software providers to offer new and inexpensive payroll solutions for micro employers who have 1-4 employees. Both Xero and MYOB have complied and have introduced $10 monthly fees for their software to help micro employers.
The ATO have produced factsheets for small employers, see below links.
This is one about 'closely held payees' – it explains about when payments made to people who are directly related to the entity, don't need to start reporting those transactions through STP until 1 July 2020.
Murray Nankivell as always is there to help employers with any ATO change. All you have to do is call or drop into one of our offices and we can advise you on the appropriate payroll software to fit your business. We are certified advisors in all the major accounting software and can support you learning any new software or newly added features.
If you are already a Murray Nankivell Banklink client and/or we lodge your quarterly BAS, we can lodge your quarterly payroll reports on your behalf as per the above decree by the Commissioner of Taxation for micro employers (1-4 employees).
If your business needs assistance with anything regarding Single Touch Payroll, contact your nearest Murray Nankivell tax accountant.