The ATO will be requiring all employers to report through Single Touch Payroll (STP) starting from the 1st of July 2019. Many businesses have begun the process already, and while it may seem daunting at first, the team at Crest Accounting can help you prepare for the change.
What is STP?
STP is a new reporting requirement from the ATO entailing all employers to report employee pay information, every single time they complete a pay run. The system has been compulsory for employers with 20 or more employees since the 1st of July 2018, and will very soon become compulsory for all employers.
How does it work?
The first thing to know is that for the most part, your payroll procedures will stay the same. For example, if you are paying your employees weekly, fortnightly, or monthly, that won’t need to change. After you’ve processed each pay run, you will need to instruct your STP enabled software to send information regarding wages, PAYG and super to the ATO. The employees’ super funds will also be reporting to the ATO, with data matching in place to ensure employers are meeting their super obligations and everyone is receiving their super on time.
How do you get ready for STP?
The first and most important step is to ensure you are running STP enabled software. There is an array of software available to you, and our team are well-equipped to assist you in choosing the software that best suits your needs; be it a simple, low-cost solution or a comprehensive accounting program. If your business has existing software, you must complete the steps within the program to enable STP, which involves reviewing employee information and a phone call to the ATO, to register and activate your chosen method. In addition to the software implications, now is a better time than any to review your payroll records and ensure all employees are being paid correctly, including PAYG withholding and super.
Can you opt-out of STP?
Generally, no, STP will be compulsory for all employers from 1 July 2019. However, the ATO has granted concessions for certain employers, including the option for those with 1-4 employees to have their Tax Agent report for them on a quarterly basis for the first 2 years. Concessions also exist for employers who may not physically be able to meet the requirements due to extraordinary circumstances (for example, no internet connection), and our team are more than happy to assist with the application for a deferral or exemption.
Are there penalties for mistakes?
If you make mistakes in the first year of STP, the ATO has advised they will not impose penalties if you subsequently fix the errors yourself. Our team can help you identify any mistakes and correct them in a timely manner, and the ATO understand there will always be transitional issues when implementing programs such as STP.
For more information on how you will be impacted and the steps you should be taking, contact the team at Crest Accounting on 02 4933 3466 or email us at crest@crestaccounting.com.au. We look forward to assisting and creating a smooth and easy STP transition for you and your business.