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Single Touch Payroll Is Coming For Small
Businesses In Australia!

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Whether you are self-employed, a PAYG earner or employ staff, you should be ready for the new payroll regulations in Australia.

The STP or Single Touch Payroll is coming for small businesses in Australia starting 1st July 2019.
You should be using the right payroll software to comply with the new regulations.

Big changes are planned from 1 July 2019 to the way your small business reports its super obligations and employee tax to the ATO.

The new system involves using payroll or accounting software that uses Single Touch Payroll (STP) when employers send their super information and employee’s tax to the ATO.

This system was initially launched in 2018 for employers who have 20 or more employees.

However, with the new legislation passed on 12 February 2019, the system will be applied to all smaller employers with less than 20 employees starting 1st July 2019.

That means regardless of the number of employees in your organisation (even one or two employees), the regulation will apply for your business, too.

On the other hand, this rule will affect your business whether you use a payroll or accounting software or not.

This article provides information on why every business needs to be ready for the new payroll regulation – The Single Touch Payroll (STP) System.

The Main Benefits Of Single Touch Payroll (STP)

The STP system is a novel way in which all employers need to report their super contribution information and PAYG to the ATO.

You need to report it after each payroll event instead of doing it monthly or quarterly.

The STP system helps employers streamline their reporting process to the ATO.

When the required information is provided after every payroll cycle, the ATO can pre-fill PAYG sections on behalf of employers as well as eliminate any double handling or potential errors.

The new system also eliminates the need for employers to generate and distribute payment summaries to the employee.

Instead, each employee can obtain such information from the “myGov” website.

Which Businesses Are At Risk With The New STP System
Businesses that are currently in any type of financial difficulty are at risk with the introduction of the new system.

This is because the ATO has immediate information about superannuation and PAYG tax payable by the employer.

For businesses that are in financial difficulty and unable to pay PAYG Tax and superannuation, the ATO will take rapid recovery action for unpaid debts.

Some of the actions the ATO may take include:

  • Issuing Director Penalty Notices – In order to make the directors of the business liable for paying PAYG tax and superannuation
  • Taking steps to place the particular company in liquidation
  • Issuing a Garnishee Notice to the bank of the company or any other party that holds money on behalf of the business

Penalties For Non-Compliance
If a company doesn’t comply with the STP rules, the ATO will raise penalties against that particular company.

However, during the first twelve months of implementing the rule, a business that fails to report on a timely manner will be exempted from a penalty.

The ATO will give the company notice for continuous failure under such circumstances.

That way the ATO could raise a penalty in the future against such companies.

What A Company Can Do If It Is At Risk From STP!

In case you are using STP but cannot pay PAYG and superannuation, you should get professional advice and negotiate a payment agreement with the ATO.

If not, the ATO may begin recovery action against your company in the near future.

You may also seek professional advice on how to turnaround your business and improve its profits in the long run.

Easing The Burden On Small Employers

The ATO is currently preparing a number of measures in order to ease the burden on small employers. Some of these measures include:

  • Asking software developers to create low-cost STP solutions for such employers – below $10 per month
  • Developing simple payroll software, mobile apps, and portals
  • Exemptions for employers who employ fewer than 4 employees and businesses with no or limited internetconnectivity – such employers can report quarterly instead of at the end of each payroll.

That’s why you need to take immediate steps to implement the necessary changes so that your business can comply with the new STP regulations from 1 July 2019.

If you are an employer with more than two employees, you should immediately talk to your tax or BAS agent to get advice on your next move.

That’s the best way to deal with the new payroll regulations of the ATO.Whether you employ staff members or self-employed, you need to comply with the new STP or Single Touch Payroll process of the ATO as the regulations will come into effect starting 1st July 2019.

Are you looking for a trustworthy and reliable ​bookkeeping service​ at reasonable prices and advice on single touch payroll? If so, then look no further than ​Numbers Pro​.

If you are looking for a blend of truly personal service and expertise, please call us today on 03 9510 2120 or contact us through our website https://numberspro.com.au/contact-us/

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