Single Touch Payroll (STP) will be the single biggest taxation compliance change facing Australian businesses since the introduction of the GST.
In July 2018 the ATO introduced STP for businesses employing 20 or more workers and the obligation will extend to employers of less than 20 staff from July 2019.
STP will require all business owners to report salaries and wages, pay as you go (PAYG) withholding, allowances, deductions and superannuation contributions to the ATO each time they pay employees.
The STP process will be made even simpler to administer if businesses review their systems and processes and aim to get three key factors right.
The first is the use of robust legal and accounting structures. This includes a good understanding of the type of employees they have, based on ATO legislation, such as contractors, casuals or part-timers.
It is important to know what Awards the workers fall under and to make sure employment contracts are up to date.
Secondly, the switch to direct ATO reporting will be far more efficient if the right software is in place to manage the process. This means being STP-compliant, will be a positive spin-off if there is also an integrated and connected system between the pay office and professional partners, such as accountants and/or financiers.
Then, focus on streamlining by having efficient employee management, including human resource planning.
A wide range of resource is available to help businesses get set for STP.
For tax and company structural advice, we advise businesses to speak to their accountant.
For advice about employment contracts, awards and employee rates, it is best to contact the Chamber of Commerce and Industry in your state, Fair Work or a workplace lawyer.
Payroll HQ has an experienced team to provide comprehensive support for the practical implementation of payroll software, setup and meeting reporting obligations.
Although the legislation is not compulsory until July 2019, we encourage business operators to prepare for STP as soon as possible to avoid any last-minute rush for help services.
Why not take our Payroll Compliance Scorecard and see the areas your payroll function can improve?
Download your free eBook, In Safe Hands, co-written by Andre Atton, Payroll HQ’s General Manager, and Tracy Angwin, CEO of Australian Payroll Association.