Small businesses need to be prepared for changes to the way they report employee tax and superannuation obligations when Single Touch Payroll becomes a compliance requirement from 1 July 2019.
Single Touch Payroll (STP) was first launched for employers with 20 or more employees, but legislation passed in February this year means it will also apply to businesses employing less than 20 people from 1 July 2019.
This compliance regulation from ATO impacts more employers than you might realise. The vast majority (over nine in 10) of Australian businesses are small businesses. Small businesses employ over 40 per cent of Australia’s workforce and pay around 12 per cent of total company tax revenue, according to a report supplied by the Australian Small Business and Family Enterprise Ombudsman.
What is STP?
Single Touch Payroll (STP) is an ATO compliance regulation that requires employers to send employee payroll information including salary, wages, PAYG withholding and superannuation to the ATO at the same time as their standard pay run. This requires the employer’s payroll system to have connection compatibility with the ATO system, meaning many employers will have to upgrade or replace their payroll system in order to meet their payroll reporting obligations.
Any benefits for employers?
With STP, employers no longer need to complete payments summaries and group certificates at the end of the financial year. Every time employees are paid through the new system, the employees’ tax and super information is sent to the ATO and available to them through myGov – the access point for online government services.
To learn more about Single Touch Payroll visit the ATO website here.
At Bare Bones Consulting, we know zero about payroll…that’s not our thing. What we do know is HR and bringing key information about employment-related topics such as Payroll to our clients’ attention. Like to have Bones on your side? Give us a call or contact us here.
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