Single Touch Payroll (STP) for all employers is now a reality. The legislation passed through the Senate on the 12th February requiring ALL employers to report under the STP rules from 1 July 2019.
What does this mean for you? Whether you employ 1 employee or 100 employees, you must be STP ready by 1 July 2019.
So, what is STP? STP is the requirement to lodge data electronically with the ATO every time you process your payroll. Your payrun cycle does not need to change. You can still pay your employees weekly, fortnightly or monthly.
The information you report to the ATO will include your employee’s salaries and wages, allowances, deductions, PAYG withholding and superannuation information.
So, what is the next step for your business?
Our STP Checklist can help you work your way through the requirements and the team at Davidsons are ready to assist.
If you have 5 or more employees:
You will be required to make sure your payroll program is STP compliant before the 1 July deadline.
If you do not currently use a payroll program, there are various low-cost options available to you with many software providers offering cost effective options to explore.
If you would like help in assessing your options to ensure the best fit for you and your business, you can contact our Bookkeeping team of specialists to help guide you to the right decision and through the implementation needed. Email the team at email@example.com or contact your Davidsons team member for more information.
If you have 4 or less employees:
The ATO are allowing you to rely on your Tax or BAS agent to report the data quarterly on your behalf for the first two years. At the end of this transition period you will be required to move to an electronic lodgment in line with all other employers. It is unclear at this stage what the quarterly reporting requirement will entail and as such, considering the move to becoming STP compliant is still relevant.
In acknowledging the changes some businesses will face working through the introduction of STP, the ATO have offered a three-month buffer period to get lodgments in place as well as a twelve month period free from penalties for mistakes made. This is to provide employers with the time needed to get their systems and processes correct.
It is likely there will be further exemptions and transitional arrangements offered to employers over the coming months as the ATO helps businesses adjust to these new changes. For instance, closely held employers, being employers that employ only non-arm’s length employees of a business (eg. family members, directors, shareholders) will be exempt from the rules until 1 July 2020.
With STP on the horizon for all employers, regardless of the number of people you employ, it is important that you understand what obligations you will need to meet from 1 July.
To find out more information email firstname.lastname@example.org or speak with your Davidsons team member and let us help you navigate your way through the STP framework.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.