Is your payroll geared to handle new reporting requirements?
After a staggered rollout, Single Touch Payroll (STP) now requires all employers to transfer their payroll transaction data to the Tax Office each time employees are paid.
That includes the electronic reporting of wages paid to their employees, tax withheld and superannuation accrued on their payroll.
More than 400,000 Australian small employers with up to four employees will need to adopt a STP solution. To comply, eligible businesses will need a software solution that can transmit payroll data to and from the ATO so that each pay cycle can be reported successfully.
According to the ATO website, software developers have been tasked with building STP solutions for smaller employers with between one to four staff. Xero and MYOB both launched their STP plans in 2018 and Reckon most recently launched their STP package options to the market. All offer products for small and medium as well as micro-business users.
STP changes have wider spanning consequences for Directors of Companies who employ staff. Essentially, the new laws provide that Directors of a Company will automatically be liable for a Superannuation Guarantee Charge liability if these amounts are not reported by the due date. Not for profit organisations with paid employees will also have to comply with electronically reporting wages paid to their employees, tax withheld and superannuation accrued on their payroll.
The upside is that being STP compliant and embracing cloud technology allows business owners to improve bookkeeping efficiency, simplify payroll and streamline superannuation payments which, in turn, avoids the messy business of incurring penalties.
Single Touch Payroll is a significant change requiring many employers to upgrade or replace their payroll system in order to meet their payroll reporting obligations.