Starting on the 1st of July 2019, every employer - that's right - EVERY employer will need to a payroll system in place in order to comply with the ATO's new initiative, Single Touch Payroll (STP).
What is Single Touch Payroll?
Single Touch Payroll is a change to the way employers will report their employee's tax and super information to the ATO.
Essentially, it means when you pay your employees every week (or fortnight, month, or however often you pay your staff) you will need to report the information to the ATO via an electronic channel.
This can be done via two ways. Either via the ATO Business Portal, or via an online Payroll Software.
This will also remove the need to complete payment summaries at the end of the financial year.
Every business will be affected by Single Touch Payroll
Why is this happening?
STP aims to reduce the occurrence of employers not meeting their obligations for their staff. This new system will automatically keep the ATO up to date about wages, PAYG, salary sacrifice and of course, superannuation contributions.
In the past, superannuation contributions have often been overlooked by small employers, but with Single Touch Payroll, the ATO will look to make sure that all employees are paid all of their entitlements and punish those employers who are short-changing their staff.
Ok, so what do I do now?
If you already have a payroll software in place, such as Xero, MYOB or Quickbooks, you don't need to do anything yet. Come July 1st 2019, each time you 'post' a pay-run you will have the option to send the information to the ATO also.
Should you not have a payroll system in place, you will need to set one up before July 1st 2019.
There are many low cost options available that will make the transition to STP easy.
This can be a blessing in disguise, as we have found the benefits of having an accounting/payroll system far outweigh any associated costs.
Contact us today to see how we can help set your business up with a system that is ATO compliant and right for you.