Single touch payroll. You’re ready right?
Single touch payroll is coming – what do you need to know to be ready? How does it affect your business? Or if you are a business adviser such as an accountant or bookkeeper, how does it affect your clients?
1) What is single touch payroll? (STP)
Quite simply, this is a new ATO digital initiative, and indeed requirement, that will overhaul the way tax and super reporting is managed across Australia. It’s a big thing. Get across it now.
For the moment, it means employers will report payments such as salaries, wages, PAYG withholding and of course super information directly from their payroll solution at the same time as they pay their employees. It will now become a tandem process. Pretty tidy.
2) Does it affect me?
Eventually… everybody will be affected (legislation pending). However the first round of initiates will be businesses employing more than 20 people. This will kick off on the 1st of July 2018.
However, in a reasonable move, the first year will be a transition period, where the ATO will be a little more lenient to allow businesses time to get used to the new reporting requirements. It will still be a mandatory necessity though!
At this stage, from the 1st of July 2019 the scope of STP will grow to include smaller businesses with less than 19 employees. Again this is still pending current legislation, although many signs point to this becoming a reality very soon.
3) What do I need to do?
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. Letters from the ATO are being sent out to all employers with over 20 employees to detail their requirements. So watch this space as the overhaul is rolled out.
If you have further questions, ask your Reckon accredited business adviser and stay tuned for our upcoming e-book which covers this topic comprehensively.