On 12th February 2019, the government passed legislation that requires even the smallest of employers to electronically file each pay run with the tax office using Single Touch Payroll, starting July 1 2019.
Nationally, it is estimated that there are 2.3 million small businesses, which employ over 40 percent of all Australian workers.
All business will now require Single Touch Payroll ready payroll software in order to comply with ATO requirements.
Why is the ATO forcing Single Touch Payroll on all employers?
Managing and monitoring Technology has evolved to a level where it has become a question of “why not digitise the payroll process?”. The advantages to the ATO are threefold:
- Faster more accessible data: Improved data accuracy, speed and accessibility, greater transparency,
- Reduce costs: Increased automation to drive down processing time and cost.
- Improved employer compliance: Smarter more automated processes will remove the potential or human errors and fraud.
How will I (as an employer) benefit from Single Touch Payroll?
1. Streamlines the payroll reporting process
With STP, employers can submit payroll information, such as wages, allowances, deductions, PAYG(W) and super, immediately after processing the payroll, this should avoid the need for further administration and lodgements at a later date.
2. Eliminates year-end payment summaries
The ATO will now automatically track the figures taken from STP submissions and make them available via online services.
This means employees can access their payment information directly through their myGov account which will include year-to-date tax and super information.
Employers won’t need to generate and distribute payment summaries to employees, saving them time and money at the end of the financial year.
3. Easy access to new employee information
With STP, employers will be able to obtain tax file numbers and superannuation information on new employees directly from myGov.
They’ll have access to the information straight away and won’t have to chase up employees that don’t provide it when asked.
5. Minimise errors
With STP, the ATO will be able to pre-fill business activity statements (BAS) – labels W1 and W2 for employers.
This will minimise the potential for human error, which can easily occur when going over finances.
Furthermore, the process will avoid double handling. Employers will also not incur penalties for getting it wrong thereby not having to pay professionals to check the accuracy.
What do employers need to do to prepare for STP?
Is my payroll software STP ready?
For those employers using an STP ready payroll or accounting software package, then the transition should be relatively straight forward. If you’re unsure of whether your payroll solution is supported, then check with your software vendor.
I don’t currently use STP-ready payroll software, what should I do?
For employers who are currently running their payroll from spreadsheets, you need to start planning your transition to an STP ready payroll software solution.
I need someone to make this STP transition simple
Contact Dexterous today by email or call 1300 996 928. Our STP setup and training packages start from as little as $250 + GST.