Never heard of the Single Touch Payroll system (STP)?
That’s because it’s a brand new major Australian Tax Office shake-up set to benefit SME business operations.
What is Single Touch Payroll?
STP system is a way to streamline your payroll reporting. It’s set to change how you’ll report the payroll information of employees. Under the new system SME businesses can report payments, such as salaries and wages, pay as you go (PAYG) withholding and superannuation information directly to the ATO. The STP is a major win for SME, as you will no longer have to submit annual payment summaries at the end of each financial year, they will be automatically deducted and credited to the Australian Tax Office.
Benefits to small business
- Less time spent on payroll lodging system.
- Employee information is updated in real-time.
- No room for error or duplication as the automated system prefills the PAYG payroll fields.
- Automated annual payment summaries.
- Employees have access to payroll information via myGov accounts.
- Streamline employee onboarding processes with employees able to obtain access to Super and TFN forms.
When do you need STP by?
SME’s with 19 employees or less will need implement the STP system by 1 July 2019. Most businesses with 20 or more employees have already began using the STP system from 1 July 2018.
How to get STP ready?
The first step is to get in touch with your payroll software provider and find out whether your current software can provide STP reporting services. The ATO has provided a list of no cost and low-cost software solutions you can use to be prepared.
Another option available is to have a third party report all employee information on behalf of your business. Follow the ATO detailed checklist for the STP system to start your implementation. A deferred start is available via the ATO if your business if not yet prepared to make the transition. Keep in mind deferrals are only allowed under certain circumstances.
Chat with us
It’s our mission to help Australian small businesses reach their potential. We are happy to assist you with your finance requirements or have a chat about tailoring a finance solution to meet your needs. Every small business owner blazes their own trail. You’re unique. So, we assess every application by looking at the big picture. Contact us here or by calling our friendly team on 1300 647 996.