Are you ready for Single Touch Payroll?
In case you missed the headlines, at of the start of the new financial year July 1, 2019, all organisations with employees will have to report under new the Single Touch Payroll (STP) system.
Organisations with 20 or more employees are already reporting through STP unless they have specifically been granted a deferral.Now, smaller-sized organisations will need to migrate to STP as well.
ALL organisations – businesses as well as not for profits – must comply. No exemptions
What is STP?
This new reporting regime, STP, means that organisations will send their payroll information directly to the Australian Tax Office (ATO) every pay cycle.
The information you will report will include your employees’ salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and superannuation information.
To see what you need to do to prepare for the implementation of STP, read the ATO checklist.
Those organisations already using Xero will be pleased to know STP readiness is already a feature of the software. Many other accounting software providers are introducing STP compatibility if they have not already done so. And while getting organised for STP will take some time and effort, over time, STP will offer some \ long-term conveniences.
What is changing?
1. No more payment summaries
You will no longer need to provide payment summaries (formerly known as ‘group certificates’) to your employees for the payments you report and finalise through STP and you will no longer need to provide a payment summary annual report (PSAR) to the ATO at the end of the financial year for the payments you report through STP.
You will be required to complete a finalisation declaration at the end of the financial year – the information you report through STP will not be tax-ready for your employees or their registered tax agent until you make this declaration.
2. Employees can access their own information online or via app
Employees will be able to view their year-to-date payment information online, which they can access through their myGov portal, or they can request a copy from the ATO.
Getting STP ready
The ATO does recognise that this may be a big step for some organisations and has mooted the possibility of extending the introduction deadline to those organisations under duress.
There will also be exemptions for organisations in remote locations that have no internet access or an unreliable connection. And for organisations with very few employees (less than 5) the ATO website also has information on lower-cost solutions. Xero has also developed one. If your organisation is not ready to change its accounting software, there are also some third-party sending service provider (SSP) solutions which you can adopt in order to meet the compliance deadline.
We have successfully implemented STP with all of our larger clients and are ready-to-roll for smaller employers too, and we are also assisting with recently introduced changes to accounting standards, regulations and reporting changes.
If you have any questions, please contact our team.