Employers will need to review their payroll procedures to get ready for the ATO’s plans to introduce a new streamlined system, for more accurate and timely reporting on wages and superannuation information, called Single Touch Payroll (STP).
In simple terms, STP means employers will need to report payments to employees such as salary and wages, pay as you go (PAYG) withholding, and super information through some form of software at the same time as you pay your employees. The idea is to give the ATO access to more accurate figures in ‘real time’.
The details are still all being finalised but what we do know is that on 1 April next year, businesses will need to do a headcount of employees. If you have 20 or more, you’ll need to start using a digital system for reporting employees’ tax and super information from 1 July 2018.
At this stage, there’s nothing official in place for small businesses (with less than 20 employees), but if the legislation all goes through, then you will be required to be STP compliant from 1 July 2019.
Don’t panic. If you are already using a payroll software program check with your provider to find out what they are putting in place to help you meet this ATO obligation. If you really aren’t comfortable changing to a STP enabled system, there will be options to have a third-party (like your accountant) report electronically for you.
We are urging businesses not to leave it until the last minute. Start reviewing your current wages system and assessing your options to ensure you will be STP compliant. It’s also important to check your superannuation guarantee requirements to make sure you are meeting your obligations.
If you’re not sure what this means for your business, ask your accountant or payroll service provider about how to get ready for STP and what options you have so that you are compliant by the deadline.
Don’t be daunted by this new reporting requirement, if set up correctly, it should provide businesses with a time-saving streamlined approach to reporting.