Single Touch Payroll System
In February 2019, the Treasury Laws Amendment (2018 Measures No.4) Bill 2018 was passed, which means that businesses with less than 20 employees will have to follow STP rules starting this July 2019.
This marks a fundamental shift in the way employers report this data, and so it is imperative for small business owners to understand what is required of them as part of this change, in order to remain compliant and ensure that their payroll and accounting systems are properly integrated with this latest update from the ATO. There are a some preparations that business owners need to make before integrating STP into their respective businesses. This includes meeting certain guidelines for implementation, as well as transitioning to an STP-compliant payroll system.
What makes the single touch payroll system so important for businesses?
The Single Touch Payroll system aims to streamline how businesses report their payroll information to the Tac Office, and provide the ATO with this data in real time (i.e. every time wages are paid, that info is automatically sent to the ATO).. Of course, integrating small and micro-businesses with STP might prove to be a challenge during the transition phase, especially for business owners. However in the long run, STP should help businesses save time and effort by automating a laborious process, while also providing employees with access to their up-to-date income, tax and superannuation details.
This also means that employers will no longer have to submit annual payment summaries at the end of each financial year, since these will be automatically deducted and credited to the ATO and will be immediately available to employees via myGov.