Single Touch Payroll or STP is a one-touch, digital payroll solution that requires employers to report salaries and wages, PAYG withholding and superannuation to the ATO each time they pay their employees. STP eliminates the need for payment summaries, payment summary annual reports and allows information to be shared regularly between employers, the ATO and yourself.
Prior to legislative amendments on Feb 12, only employers with 20 or more employees were required to switch over to STP. Amendments now require all businesses including an estimated 400,000 micro-businesses with 4 or fewer employees.
As an employer, you will need to report payroll to the ATO in real-time alongside your employees pay cycle. This can be done by:
Firstly; we recommend a robust, holistic, software solution such as Xero. Xero offers an end-to-end solution for any size business and is creating a stand-alone product for micro businesses that will cost $10 or less per month. If you are not already using digital solutions to manage your payroll, we can set you up with a product that suits your business and your needs.
If you already use software that has STP integration and you or your bookkeeper manages payroll, they can set this up for you. You can research third-party solutions that suit your needs such as these recommendations from the ATO, or contact a registered agent to help you make the right decision for you and your business.
ATO Commissioner Chris Jordan has given a personal guarantee that they will take a flexible approach to the STP transition. Small businesses will be allowed to start reporting any time between 1 July and 30 September 2019. There are also options to request a deferral and exemptions exist for employers experiencing hardship.
Whilst there is recourse and reversal options built-in to our recommended solution Xero, The ATO advises “There will be no penalties for mistakes, missed or late reports for the first year.”
STP isn’t just a governance and compliance solution. It removes the need for a business to manually:
And has a myriad of productivity benefits for those not currently using a digital solution.
At Trinity Accountants, we see this as an opportunity to empower business owners. To give you access to up-to-date financial data, take you out of the ‘excel spreadsheet’ and ‘manual overwhelm’ of payroll and introduce efficient processes that save you time, stress and money.
If you need more information regarding Single Touch Payroll, or want to discuss the impact it may have on your business, we’d love to speak to you. Contact us today and let’s make the transition together.