Are you ready for the Single Touch Payroll deadline?
Have you sorted out Single Touch Payroll arrangements for your business? If not, it’s time to take action! All businesses must be fully on board with this electronic payroll reporting standard by the end of September, which may mean upgrading or purchasing new payroll software.
From 1 July 2019, Single Touch Payroll (STP) reporting will become mandatory for all employers.
Businesses who employ 20 or more employees, should have already implemented Single Touch Payroll from 1 July 2018. Small businesses (ie those with 19 or less employees) have previously been exempt, but now need to take action to ensure they’re ready. Small businesses have a three-month transition period between 1 July and 30 September to get STP reporting fully operational.
STP is an electronic reporting system that requires employers to submit payroll information such as salaries, wages, allowances, PAYG withholding and superannuation contributions to the ATO directly through their payroll software (or third party service provider) when they pay their employees. STP is expected to improve the ATO’s ability to monitor tax and super compliance, and to respond accordingly.
How does it work?
You’ll still pay your staff according to your regular pay cycle (eg monthly or fortnightly), but with the added requirement of submitting payroll information electronically to the ATO each cycle.
Many businesses will take care of this in-house with payroll software that can connect to the ATO. Alternatively, you can arrange for a registered tax or BAS agent to report on your behalf.
You’ll still give your staff a payslip each pay cycle, but you’ll no longer need to prepare payment summaries at the end of the financial year because your staff will be able to access all of their STP payroll information through the ATO website in order to prepare their tax returns.
If your business has “closely held payees” such as family members who are not paid a regular salary or wage, talk to your adviser about flexible STP reporting arrangements that may be available to you.
What do I have to do?
There are many software providers in the market offering STP-compliant software that meets the ATO’s requirements. If your business already has payroll software, check with your provider whether it has been made STP-compliant and whether you need an upgrade.
If you don’t have existing software or you want to find a new solution, speak to your accountant about solutions best suited to your business. Your accountant will be able to advise you of an option that’s compliant with ATO requirements and help you through the transition.
Need more time?
Small businesses can start reporting any time from 1 July 2019 to 30 September 2019. If you need more time to get ready, you can apply for a deferred start date. Exemptions are also available if you operate in an area with poor or no internet.
We can help you find the right solution to match your STP reporting needs and ensure you’re ready for the deadline. Contact your usual Mazars advisor or alternatively:
Brisbane - +61 7 3218 3900
Sydney - +61 2 9922 1166
Melbourne - +61 3 8458 0000
For further information on STP you can read our earlier blog here .
Xero and MYOB also offer useful resources including FAQ’s regarding set-up, visit:
- Xero – Set up Single Touch Payroll
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.