We’re a few weeks out from the end of financial year, and with that comes a triage of new reporting updates and changes outlined by the ATO that business accountants in Perth have been busy helping small businesses prepare for. Most notably and perhaps most importantly is the introduction of Single Touch Payroll (STP).
What is Single Touch Payroll?
Single Touch Payroll is the biggest initiative introduced by the ATO since GST, and the single largest move toward payroll centralisation since PAYG in 2000. Single Touch Payroll is a new reporting scheme implemented by the government to not only streamline employer reporting processes, but it will also play a crucial role in creating transparency during the reporting process to guarantee employers are meeting their payroll obligations such as tax and super. First announced in 2016, the initiative has been slowly rolled out over the last three years. However, as of July 1st, 2019, all businesses large and small are legally required to adhere to this new reporting scheme (with a few select exceptions).
What Does it Mean for Small Businesses?
Fortunately, it’s a lot less complicated than it sounds. It’s essentially a more streamlined and regular form of employer reporting that will save you a large amount of stress during tax time in the future. The new reporting process is designed to be more efficient, quicker and far less administrative than it has been in previous years. Every week, fortnight or month when employers are processing employee payments, the ATO will receive a notification. All employee salary, PAYG & superannuation information will be reporting directly to the ATO in the notification and will then appear in every employee’s myGOV account.
How will it work?
The purpose of these changes is to eradicate a black market, and negate the issue of employers not making their legal payroll contributions, which is why all businesses now notify the ATO every time you make a pay run. Because of this new reporting requirement, you will need to ensure you’re now using STP certified software or payroll providers. If you’re not sure where to start, we highly recommend consulting a small business tax accountant.
The following software is already STP certified so you won’t need to organise alternative software:
Alternatively, there is a wide range of low-cost service providers starting for as little as $10 per month.
How will it benefit small businesses?
There is a wide range of benefits that come with the introduction of Single Touch Payroll for businesses of all sizes. If you’re a business that has always been operating your business in a systemised manner, the introduction of STP should not worry you, it’s existence will simply help you streamline your internal processes. Here’s a list of some benefits you can expect to experience with the introduction of STP for all businesses as of the 1st of July 2019.
Setting up your accounts and finances to prepare for Single Touch Payroll can be a confusing and somewhat daunting task that you want to get right, from the beginning. Consulting professional business accountants in Perth such as Lawrence Group can help relieve the stress that accompanies large internal changes – especially where finances and reporting is concerned. If you’re seeking advice and assistance during this new initiative Lawrence Group is here to help you transition to STP with complete comfort and ease.
If you are a business owner seeking to utilise Single Touch Payroll in your business, Lawrence Group has a diverse team of specialised business consultants that can provide solutions. We’ve been helping businesses like yours grow for over two decades & we’d like to help your business too.
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