You may have heard about ‘Single Touch Payroll’ (STP). It is a new reporting system required by the
ATO in relation to payroll reporting. It
effectively requires ‘real time’ reporting of employees’ wages, tax and
Employers with more than 20 employees had to comply with this system by six months ago. But the fun now begins as the law extends to apply STP to employers with 19 or less employees effective on 1 July 2019.
In the past payroll information has only been supplied on a
quarterly and annual basis. Now it will
need to be sent to the ATO every time you do a pay run.
If you already use a software package to report your software you should talk to your provider about the STP functionality.
If you complete your payroll manually the ATO is encouraging
employers to use a software system, but will have some other alternative
available where your tax agent can lodge on your behalf.
‘Micro-employers’, that being employers with between 1 to 4 employees, can use STP software. However, the ATO has made some concessions for this group, saying that initially they will only need to report quarterly.
It is important to keep in mind that if you, as the business
owner, are receiving a wage from the business you will be counted towards the
number of employees for STP purposes.
STP also means that tax planning for business owners cannot be left
until just before the financial year end.
The ATO message around STP continues to be ‘don’t panic’. But, you do need to take action now to ensure thing are in place for 1 July 2019.
Please give us a call if you have any queries regarding STP.