Single touch payroll must knows for Australian small businesses
Single Touch Payroll – or STP – is a looming reality for small Australian businesses and will require you to take action. First cabs off the rank were businesses with over 19 employees on the payroll which began reporting Payroll to the ATO through STP last year. Next up will be those with 19 employees and under, or the small business community. With our focus set squarely on the small and micro business community we want to give you an important reminder of some must-knows. With many micro businesses with under 4 employees there will also be a high prevalence of those working from excel or paper – those in this basket will need to pay more attention than most. Please also see our very comprehensive STP resource page with all the information and links you will ever need.
1) Hang on, what’s STP?
Quite simply, this is an ATO digital initiative that began last year that will overhaul the way tax and super reporting is managed across Australia. It’s a big thing. Get across it now.
It means employers will report, for example, payments such as salaries, wages, PAYG withholding and of course super information directly from their chosen solution at the same time as they pay their employees. It will now become a tandem process. Pretty tidy.
2) 1st of July deadline!
The legislation has now passed so get yourself on Reckon One or an STP ready accounting app immediately as we are already STP enabled and on July 1st this year everybody will be affected. Penalties from the ATO may apply and you can’t avoid this forever do get moving people. Chat to your bookeeper or accountant if you are still unsure how to act.
3) What do I need to do?
At this stage you really need to get onto approved software and consult your business adviser. If you are still on paper you need to move quickly as this will quite frankly no longer fly. At this stage the ATO is working closely with industry partners, tax advisers and software providers, such as Reckon, to ensure the move is smooth for all involved. You will see these features ready to use in your favourite accounting software automatically.
4) Reporting requirements
Get ready to report. Payments that must be reported through STP submission will include:
· Salary & wages
· Director remuneration
· Return to work payments to individuals
· Employment termination payments (ETPs) – not compulsory if the employee has died
· Unused leave payments
· Parental leave pay
· Payments to office holders
· Payments to religious practitioners
· Superannuation contributions (at the time the payment is made to the fund).