Single Touch Payroll and Its Affects on You
The biggest fact you need to know is that Single Touch Payroll was rolled out by the Australian Tax Office (ATO) from July 1, 2019 for businesses with 1 to 19 employees, and prior to that for employers with 20 or more employees. If this is you, please read on:
What is Single Touch Payroll?
Single Touch Payroll is being rolled out across Australia by the ATO to help provide real-time assistance with making organisation’s payroll processes timelier and more accurate. And it is compulsory. Single Touch Payroll for 20+ employees was first introduced in 2018.
And there are a few things you really need to know about it and how it will affect your business come July.
Single Touch Payroll was proposed to help companies better manage their employees’ payroll, tax and superannuation reports.
It is one of the biggest changes to business reporting since GST was established.
Single Touch Payroll is a way of sending gross wages, tax and super information to the ATO from your payroll or accounting software each time you pay your employees.
Who does it affect?
Employers with 20 or more employees are expected to have started STP reporting unless granted a special deferral while those with less than 19 are required to migrate to the new system now.
It is compulsory for smaller employers (those with less than 20 employees).
The ATO recognizes there are a significant number of smaller employers who do not use any type of payroll software when processing the pays each week/fortnight, such as micro businesses (employers with 1 to 4 employees). In this case, the ATO may not require you to adopt/buy payroll software in order to comply with Single Touch Payroll reporting. Micro businesses may be initially allowed to have your registered tax or BAS agent to report quarterly, rather than each time you run your payroll.
Some of the major software houses, such as MYOB, Xero, Intuit and Reckon have all since announced that they will be providing an option at $10 or less per month, with their products available between April and June. (Source: My Tax Savers)
If you are a micro business and would more info on this – please get in touch with me so we can look at the options available to you.
How does Single Touch Payroll work?
If you have a digital payroll software, applying STP reporting is a few clicks away usually.
However, you need to confirm you have the correct information that STP would need like company information, then your employee details like tax file number and personal information, such as address and phone number.
It’s also important to check that your employees are receiving their correct wages/salaries and that bonuses, deductions and other super information are factored in correctly.
All this information gets into the Single Touch Payroll -enabled payroll software and the ATO gets all your payroll information accordingly.
How does Single Touch Payroll affect your business and reporting?
Single Touch Payroll reporting does not affect payment cycle or anything significant.
It simply allows the ATO to better understand your payroll payments and obligations as an employer.
Please know: You still have to lodge your BAS or IAS separately and on time, it’s not a replacement, just a tool for the ATO to compare the information that has been reported via your BAS/IAS and super funds.
Also, at the end of each financial year, you no longer need to provide payment summaries to employees for reported payments that went through Single Touch Payroll as they are already with the ATO. Employees can now get their payment summaries online via the myGov website.
If you do not have a Single Touch Payroll reporting payroll solution yet, please talk to BalanceWell Bookkeeping about getting your business set up. This is an area you need to abide by.
Finding more information about Single Touch Payroll
For personalised information it’s best to get in touch so we can work out what you need to do to comply.
If you are a small business and you need a new bookkeeper, need some training or need to get your books and accounts back into a working order so you can grow your business with new clients and more sales, please get in touch today and let us help you.
For more information, please contact Judy on 0431 103 257 or email at email@example.com to arrange an appointment.