The ATO’s Single Touch Payroll (STP) reporting legislation will come into effect on 1 July 2019 for businesses with less than 20 employees. Employers with more than 20 employees have been required to be STP compliant since 1 July 2018.
Single Touch Payroll is a cloud-based system intended to streamline payroll reporting by sending employees salary, PAYG Withholding amounts and superannuation directly to the ATO in real-time, allowing for transparency and accuracy.
This reporting will simplify the year-end process of submitting annual payment summaries and provide employees and the ATO with increased access to real-time information. It will also reduce the need for paper TFN Declarations and Super Choice Forms.
How do you ensure your business is STP complaint?
There are different reporting options to help smaller employers, particularly those who have no existing payroll software. The government has indicated initially they won’t force smaller employers to purchase payroll software if they don’t currently use it. That being said, there are distinct advantages in having STP; including that it makes businesses more agile by allowing them to make timely decisions.
To be STP compliant, you must first ensure that your payroll software is capable of STP Reporting. If your business is still using desktop software for your payroll, chances are you will need to upgrade to a cloud-based provider in order to comply with these new reporting obligations.
Following the passing of this legislation, Xero and MYOB have announced they will be offering low-cost STP solutions for those businesses with 1-4 employees. There are also alternative options available for a transitional period, such as allowing your BAS agent to report quarterly, rather than each time you run payroll.
Once you have complying payroll software you will also need to ensure you have an AUSkey installed on your computer. This will enable you to link your payroll software with your AUSkey and report directly to the ATO.
We recommend that you contact your payroll provider or William Buck to confirm that your business is ready for STP for 1 July 2019.
If you are considering upgrading your accounting software, William Buck has experts in cloud accounting software and can help you to evaluate the systems available. Contact one of our advisors today.