Are you ready for Single Touch Payroll?
For employers with 19 or fewer employees, single touch payroll (STP) legislation came into effect on the 1st of July 2019. Are you registered correctly or have you put it in the too hard basket? What is Single Touch Payroll and what do the changes mean for your business and who does it affect? What do you need to do so that you are compliant?
What is Single Touch Payroll?
For employers with 20 or more employees, you will already be familiar with STP, but if you are unaware, STP is the mechanism for sending tax and super information to the ATO directly from your payroll or accounting software every time you pay your employees. The legislation was passed in February this year to extend this to employers with 19 or fewer employees. This process will also replace the old PAYG Payment Summaries (PAYGPS) provided to your employees each year and the PAYGPS Statement lodged with the ATO.
How to prepare your small business for STP and ensure compliance
Most popular payroll software companies will have the correct facilities ready to go, such as Xero and MYOB. If you are unsure, talk to us. There are a few things to be aware of you as you get ready to use STP reporting.
- Check your software – you may need a software update or additional step added to your process
- Ensure you have factored STP into your payroll process
- Ensure your payroll compliance is up-to-date generally, including employee benefit, wage and super entitlements and maintaining accurate records
The first year of using STP reporting is a transition year and you will have assistance from the ATO, so penalties for errors will not generally apply. Under certain circumstances you can apply for a deferral through the ATO. The ATO gives a list of possible reasons for deferring, including lack of internet coverage, or if further development of software is needed. But you do need to take some action, inactivity or ignorance are not going to be acceptable excuses in the ATO’s eyes.
So speak to us today to ensure you are correctly registered or deferred.