For the past 6 months, Single Touch Payroll has been a requirement for businesses with more than 20 employees or more. This single touch payroll has been toted as being the biggest compliance change for business since the introduction of GST in 2000.
If that comment reminds you of the boy who cried wolf, that’s because we’ve heard it before, and until last week I would have agreed with you.
However, on Wednesday (5th December) legislation passed the senate that makes Single Touch Payroll (STP) a requirement for all businesses, including those with less than 19 employees.
So what is Single Touch Payroll (STP) and what does it mean for you as a business owner…
STP is basically real time reporting to the ATO on payroll transactional details. Each time a pay run is completed, information such as gross wages, tax withheld, deductions and superannuation is sent to the ATO. This will allow them to increase their data matching capabilities and continues on the ATO’s “big-data” band wagon.
If you use an up-to-date accounting package such as Xero or MYOB (the online one) or Quickbooks Online (QBO) then your software is already compatible. However, if you process wages in older software or manually, then this is something you’re going to need to look at.
You and 730,000 others… that’s how many businesses are going to need to start doing STP according to the ATO. Considering there are currently about 45,000 businesses who have commenced STP reporting in the past 6 months, theres a bit of work to be done here. Especially since this is all meant to be in place by 1 July 2019.
This is definitely a space to keep an eye on in the first half of 2019. We are likely to see further details around reporting requirements for those transitioning businesses. Don’t be surprised if we need some generous transitional concessions from the ATO. Especially given the relatively short timeline of implementation. Chris Jordan (ATO Commissioner) has already said in a webinar last month that the ATO wasn’t interested in “cracking the whip to ensure short-term compliance” and are instead taking a long-term view.
Having said that, this should be looked at as an opportunity. Especially if you are one of those businesses that has less than 19 employees, and uses an older desktop version of an accounting package or processes their payroll manually.
Its highly likely that some low-cost online payroll solutions are going to start presenting themselves. These might be appropriate foryou, however a phone call to us is definitely recommended prior to signing up to anything.
Another thing to consider is the implementation of a complete online accounting package. This will ensure you are not only compliant with STP but should also present you with several other benefits for your business.
If you’re interested or have any other questions about STP, what it means for you and what your options are, please give us a call on (07) 4728 2800.