Get ready for Single Touch Payroll
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Get ready for Single Touch Payroll
Legislation has passed requiring Australian businesses with 19 or less employees to report payroll data directly to the ATO with each pay run from 1 July 2019.
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Alicia Zinn via pexels
The Australian Government has officially passed legislation that changing the way employers of 19 or less employees are required to submit payroll data to the Australian Tax Office (ATO).
Under the legislation, Single Touch Payroll (STP) will be mandatory for employers with 19 or less employees from 1 July 2019. This will impact a significant number of Australian businesses, with around 2,065,500 small businesses in Australia employing less than 19 people, according to a report of key small business statistics by the Australian Small Business and Family Enterprise Ombudsman.
STP became mandatory for all employers with 20 or more employees on 1 July 2018.
How does STP work?
According to the ATO, from 1 July 2018 employers should use payroll or accounting software that offers STP to send their employees' tax and super information to the ATO each time they run their payroll and pay their employees (whether weekly, fortnightly or monthly). The information is sent either directly from the software, or through a third party, such as a sending service provider.
Employers may voluntarily move to STP earlier to take advantage of streamlined payroll reporting.
How much will it cost?
The ATO says it won't force employers to purchase payroll software if they don’t currently use it, suggesting different STP reporting options will be available by 1 July 2019 to help smaller employers. This may include allowing registered tax or BAS agents to report quarterly, rather than each time payroll is run.
In addition, the ATO has asked software developers to help micro employers by building low-cost STP solutions at or below $10 per month, including simple payroll software, mobile phone apps and portals. The ATO maintains a register of software providers who intend to build low-cost solutions on its website here.
Read more on the ATO rules of reporting through Single Touch Payroll here.
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