In Breaking news this week…….Single Touch Payroll legislation has passed through Parliament, so our Blog today is a must read for employers of less than 20 employees.
Single Touch Payroll (STP) legislation passed through Parliament this week for employers of all size. This legislation has applied to businesses employing more than 20 employees since 1 July 2018 and now, with legislation passed through parliament this week, from 1 July 2019 all employers will be required to comply with the Single Touch Payroll requirements. The ATO website says the following in relation to Single Touch Payroll:
Single Touch Payroll (STP) changes the way employers report their employees’ tax and super information to us.
Using payroll or accounting software that offers STP, employers send their employees’ tax and super information to us each time they run their payroll and pay their employees.
The information is sent to us either directly from the software or through a third party, such as a sending service provider. Software providers can tell you more about how they offer STP reporting.
So what does this mean for small business and employers?
If you currently have employees (including companies where the directors are paid by a salary) and you are not using an online or digital payroll service you will need to update the way you pay your employees and run your payroll system. The introduction of this reporting system has specifically been designed and implemented to increase the data matching capabilities of the ATO in relation to employers meeting their tax and superannuation obligations. Whilst this may seem like an additional compliance requirement for employers, research conducted by Xero has revealed that once implemented employers using digital reporting estimate they save on average 3.1 hours per week on payroll requirements.
What should all employers do?
- Assess your current payroll system
- Confirm the current payroll system being used has the capability to meet the STP reporting requirements
- If the current payroll system doesn’t meet the STP requirements contact your client manager at Sage Business Group to discuss your payroll and accounting options
The time to act is NOW – as of this week Single Touch Payroll is a legal requirement for ALL employers from 1 July 2019. A payroll system compliant with the requirements of Single Touch Payroll MUST be implemented ready for the first payment after 1 July 2019 so it’s important to act now to be ready for the new year.