The ATO’s Single Touch Payroll (STP) reporting legislation comes into affect on 1st July 2018 for all businesses with 20 or more employees and then becomes mandatory for employees with 19 or less from 1st July 2019.
STP is a cloud-based reporting system which is intended to streamline the payroll reporting by sending employees salary, PAYG Withholding amounts and superannuation directly to the ATO in real-time, allowing for transparency and accuracy. In the lead up to 1 July 2018, the priority for businesses with 20 or more employees is to ensure that they have STP compliant payroll software installed ready to comply. If your business needs to change payroll systems, this is a good time to look at the reliability and functionality of your existing accounting systems. Both Xero and MYOB have indicated that they are updating their payroll systems to be STP compliant by 1 July 2018.
For those businesses who don’t need to comply until 2019, upgrading software now, could help you gain competitive advantage due to benefits of having an updated system, including making timely decisions and having access to live-time data.
The hidden benefit of these changes and the new STP requirements are that employers will no longer be required to submit annual payroll reports, although they can still choose to do so, to the ATO. Furthermore, new employees can complete TFN declarations and super choice online.
Is it time to upgrade your accounting software?
We recommend that you contact your payroll provider, bookkeeper or Dalcorp Accounting Services to confirm that your business is ready for STP and discussed how and when this transition needs to occur.