Single Touch Payroll is your business ready

The ATO’s Single Touch Payroll Reporting legislation will come into effect on 1 July 2018, for all businesses with 20 or more employees and, become mandatory for employers with 19 or less employees from 1 July 2019. 

You can find out more about the changes for small businesses here.

Single Touch Payroll (STP) is a cloud-based system which is intended to streamline the payroll reporting by sending employees salary, PAYG Withholding amounts and superannuation directly to the ATO in real-time, allowing for transparency and accuracy.

The outcomes of these changes are that employers will no longer be required to submit annual payroll reports to the ATO. Furthermore, new employees can complete TFN declarations and super choice online.

So how can businesses prepare for these and future changes to ensure they remain compliant?

In the lead up to 1 July 2018, the priority for businesses with 20 or more employees is to ensure that they have STP compliant payroll software. Once installed, businesses can start using the software before the key dates. Although effective 1 July, employers must begin counting all their employees ‘heads’ from the 1st of April 2018.

If your business needs to change payroll systems, this is a good time to look at the reliability and functionality of your existing accounting systems. Both Xero and MYOB (Essentials and AccountRight online) have indicated that they are updating their payroll systems to be STP compliant by 1 July 2018.

If your business is processing payroll using server or desktop software, this may not be STP compliant and you will need to transition to STP compliant software. The Government will provide businesses, with a turnover of less than $2 million, a $100 non- refundable tax offset for STP enabled software purchases or subscriptions made in the 2017-18 financial year.

For those businesses who don’t need to comply till 2019, upgrading software now could help you gain competitive advantage due to benefits of having an updated system, including making timely decisions.

What if you or software provider aren’t ready by the date? 

Make sure to check the penalties, exemptions and deferrals available depending on your circumstances. In summary:

  • Administration penalties may apply. However, unless you have received written notice, a transition period will mean penalties will be waived for the first 12 months.
  • In some cases, deferrals may be submitted through a Deferral Evidence Package (DEP) behalf of your software provider if they aren’t ready.
  • Exemptions may apply in special circumstances, for example, those living in rural areas.

We recommend that you contact your payroll provider or William Buck to confirm that your business is ready for STP. If you are considering upgrading your accounting software, William Buck has experts in each of Australia and New Zealand’s top cloud accounting providers and can help you to evaluate the systems available.

Is it time to upgrade your accounting software? William Buck Principal Nick Kenny discusses
Five Signs your Accounting System is Out of Date.

Single Touch Payroll is your business ready

Nick Kenny

Nick is a Director in our Business Advisory division with a wealth of experience on how to use accounting systems to drive business efficiencies. Supporting clients across a range of sectors, he's expertise includes review of legacy systems, providing advice on new technology systems, virtual CFO applications and conversion of accounting and business software to cloud based programs.

Read more >

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Be Informed

Be Informed is William Buck's regular newsletter, filled with up to date news and relevant advice for individuals and businesses.

Get in touch!