Single Touch Payroll
Whether you like it or not, Single Touch Payroll (STP) is coming; and when it does, it’ll be here to stay!
If you currently employee staff STP will be a game changer!
Remember back in 2000 when the ATO introduced GST (yep, once upon a time there was no GST); well, at the time the small business world kind of went into a little bit a tail spin. Basically, it completely changed what business needed to do, and when they needed to do it.
For employers, STP is going to have a similar impact!
Don’t stress though, almost two decades on, the GST system is now just a part of life. In not too much time at all, Single Touch Payroll will be too.
Let us give you the basics.
So, when do you need to be ready for Single Touch Payroll?
If you employee 20 or more staff, you’ll need to be compliant by 1 July 2018.
If you employee 19 or fewer staff, you’ll need to be compliant by 1 July 2019.
Ok, but how will it affect you?
Let’s do this in dot points; we’ll start with the things that are likely to impact your business the most:
- With Single Touch Payroll, you will send your employee’s payroll and super info to the ATO each time you pay them.
- You will need payroll software that offers STP reporting.
- As long as you complete a finalization declaration, you will not need to provide payment summaries to your employees for certain payments you report through the STP system.
- Employees will be able to access this information through MyGov as the information is reported to the ATO.
- Your payroll cycle will not need to change; you can still pay your employees weekly, quarterly or monthly;
- Your payment due dates for PAYG withholding and super will not change
LBW’s take on STP?
For the majority of businesses, once you get used to the way the software works (and trust us, it’s not that hard), you should not notice too much change.
It will mean that each pay run will need to be done at the same time the employees are paid. Most businesses already do this; some don’t.
It will also mean that keeping track of your payroll manually or via ‘desktop’ software just isn’t going to cut it anymore. You will need software that is compatible with STP reporting. Again, many businesses already have this; some don’t.
Some business owner’s still use business cash for personal spending and calculate their wages at the end of the year – under STP; this isn’t going to cut it.
From a compliance and audit perspective, it will mean that the ATO gets real-time data (and trust us, they love real time data). They’ll know when you’re late lodging, how much you owe them and when you owe it. Given the significant investment they have made in the STP system, it would be wise to assume that they’ll be using this information to come down harder and faster on non-compliers.
Our advice? Embrace STP and make sure you’re ready. To be frank, you haven’t got a choice.
Ok, so you need to get ready for STP, how can LBW help?
There are a number of ways we plan to help our clients comply with and get ready for STP. How we help you will depend largely on where your business is at.
Where do you fit in?