STP starts now! What if you aren’t compliant?
STP has been coming at us for some time now and guess what? It has finally landed. Start panicking.
You now need to start reporting your payroll information including super to the ATO every pay run – ideally through accounting software like Reckon One or our Reckon Payroll App. Have you found yourself caught out? You are not alone so let’s see what happens next.
I forgot! Can I get an extension?
Oh, this is not ideal but relax, it’s not the end of the world either. Many people forgot and thankfully there is time to fix it.
While it is not the time to get complacent, it is worth noting that the ATO is not out to get people at this stage – and an understanding tone has been struck.
ATO Commissioner Chris Jordan has put out a press statement today to clarify the intentions of the ATO moving forward:
I want to reassure small business and give my personal guarantee that our approach to extending Single Touch Payroll will be flexible, reasonable and pragmatic. In particular, the ATO understands there will be circumstances where more time is needed to implement STP or lodge reports.
So there you go, there are particular concessions and allowances being considered for micro businesses of 1-4 employees who will be hit hardest in terms of small sizes and more red tape.
ATO changes and clarifications announced
There have been a number of clarifications made by the ATO as to what we can expect form today, including some newer announcements and reminders.
- If you have 1-19 employees you can start reporting from now until 30 September 2019
- If you are over 20 employees, you should have already been reporting for one financial year. Possible penalties may apply.
- The ATO has announced that there will be no penalties for small business with up to 19 employees for the first year.
- The ATO may grant deferrals to any small employer who requests additional time to start STP reporting
- Certain businesses who have ‘closely held payees’ such as family members will not have to report their pay until 2020 and may only have to be reported quarterly.
- The ATO will provide exemptions from STP reporting for employers facing hardship or in areas with unreliable internet connections.
- No more payment summaries – If you are not yet reporting through STP, you will need to provide payment summaries by 14 July – and if have switched over you need to submit your STP finalisation report to the ATO by 31 July (for this year).
Do you only have 1-4 employees?
There is particular focus today on the micro business community. A micro business is defined as having 1-4 employees.
The ATO have understood that such micro businesses will have far more trouble adapting to new requirements and require particular flexibility. with less staff, money and less need for (and use of) complex accounting software, it has been deemed the micro business community will have the most trouble complying.
To a warm reception, the ATO have extended an olive branch of sorts to micro businesses, as Commissioner Jordan states:
We will offer micro employers (1 to 4 employees) help to transition to STP and a number of alternative options – such as allowing those who rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each time payroll is run.
Reassuringly though, here at Reckon have built a Reckon Payroll App specifically for micro businesses who don’t use accounting apps, so you will have no trouble getting compliant without the need for more advanced software until your business is ready.
Room to grow
If you are a small business of over 4 employees and have not yet sorted out how you will start reporting payroll, we have 2 top tier, extremely low cost options for managing your business and complying with STP.
So there’s no need to delay just because you have a grace period – its still got to get done. On the brightside, switching to an easy cloud solution has a host of business benefits and time smashing tools built in – you will wonder how you lived without them.