27 Jun Single Touch Payroll Is Here

Single Touch Payroll (STP) is the latest initiative by the ATO, who are describing it as ‘the biggest changes since GST’, which has definitely caused some uncertainty and confusion for small business owners. STP is intended to streamline business reporting and move towards digital formats, increase accuracy and reduce non-compliance.

Beginning July 1, small businesses (with 1-19 staff) will change the way they interact with the ATO. Single Touch Payroll (STP) is going to be an adjustment for many to get their heads around but in the long run this should make your EOFY easier. STP is going to help you cut down on your paperwork, reduce reports you need to provide to your employees, and will give employees up-to-date information on their income, tax, and superannuation.

Under the new STP regulations, employers will send payroll information to the ATO with each pay run – whether you pay weekly, fortnightly, monthly or a combination. Reporting on each pay run means you’ll never have to fill out another PAYG certificate for an employee ever again (I can hear the collective bookkeepers rejoicing now!). Single Touch Payroll became mandatory for businesses with 20 or more employees on July 1st last year. Those businesses with 19 or less employees will have to begin STP from July 1, 2019 but could have begun participating any time during the 18/19 financial year.

Good news for those micro businesses with 1-4 staff members, there are free and low-cost programs available to keep you compliant (and they’re super easy to use!). Try this freebie by Reckon.

Here are some of the benefits of STP for Employers

• Sending your payroll at the same time as you process your pay run each cycle saves time at the End Of Financial Year, because you’ve already submitted your information to the ATO throughout the year.
• When using the ATO Business Portal to submit your BAS, the ATO will prefill the W1 and W2 fields, reducing double handling and the potential for errors.
• No more PAYG payment summaries! All of the information will be available to your employees online via their MyGov accounts.
• You can also on-board new employees quickly with online commencement forms such as the TFN Declaration and SuperChoice forms.

The benefits for Employees

• Access up-to-date information on your superannuation, income and tax securely via your MyGov account.
• Your tax info will pre-fill in your tax return, making it much easier and faster to submit your tax return as you don’t need to wait on your employer to fill out a payment summary.
• Access online commencement forms such as TFN Declaration and SuperChoice.

The new STP software requirements mean that businesses may need to upgrade their payroll software. Payroll software providers will also need to upgrade their software to include Mutli-Factor Authentication (MFA) software, to keep your data safe. You may have used MFA previously when online shopping or using internet banking. MFA is linked to your computer or your mobile phone and will send you a code to confirm your identity prior to allowing you to submit payroll information through STP.

While it will always take time to adjust to new changes, there is plenty of help available. Make sure you are STP ready before July 1st, 2019 by contacting your software provider, bookkeeper/accountant, or the ATO. Having already used the Reckon Payroll Premier and their GovConnect online portal, I can tell you first-hand that the process is very simple – I promise! Setting up for the first time will be the most time consuming exercise, make sure you write down any pins, passwords and usernames and keep them in a safe place, you will also need to set up your MFA so have your mobile phone ready.

Good luck with your End Of Financial Year preparations. I hope it’s been a year of growth (both in experience and profits) and that your transition to Single Touch Payroll is one of ease for you.