Getting your small business ready for STP reporting
From 1 July 2019, Single Touch Payroll (STP) reporting will become mandatory for all employers. Small businesses (i.e. those with fewer than 20 employees) have previously been exempt, but will now need to take action to ensure they’re ready.
These small businesses have a three-month transition period between 1 July and 30 September to get their STP reporting fully operational.
STP is an electronic reporting system that requires employers to submit payroll information such as salaries, wages, allowances, PAYG withholding and superannuation contributions to the ATO directly through their payroll software (or third party service provider) when they pay their employees. The government says that STP reporting will improve the ATO’s ability to monitor tax and super compliance, and to take action when required.
How does it work?
You’ll still pay your staff according to your regular pay cycle, but with the added requirement of submitting payroll information electronically to the ATO each cycle.
You’ll still give your staff a payslip each pay cycle, but you’ll no longer need to prepare payment summaries at the end of the financial year because your staff will be able to access all of their STP payroll information through the ATO website in order to prepare their tax returns.
If your business has “closely held payees” such as family members who are not paid a regular salary or wage, there are flexible STP reporting arrangements that may be available to you.
Simple software solutions
There are many software providers in the market offering STP-compliant software that meets the ATO’s requirements. If your business already has payroll software, check with your provider whether it has been made STP-compliant and whether you need an upgrade.
If you don’t have existing software or you want to find a new solution you may contact us for more information on various software options available.
Need more time?
Small businesses can start reporting any time from 1 July 2019 to 30 September 2019. If you need more time to get ready, you can apply online for a deferred start date through the ATO’s business portal alternatively contact us. You may also be eligible for an exemption from STP reporting for one or more financial years if you operate in an area with poor or no internet.
Don’t wait until the last minute – talk to us to get started now on (03) 8534 5500. No matter how small or large your business is, we can help you find the right solution to match your STP reporting needs and ensure you’re ready.