Single Touch Payroll to Cover All Businesses

The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 has now passed both Houses.  This was an important moment in the evolution of Single Touch Payroll (STP) as the amendment law included legislation that requires employers with 19 or fewer employees to report from 1 July 2019. STP began with the law being applied to businesses with 20 or more employees, who were required to begin reporting from 1 July 2018.

There are approximately 781,908 businesses with 19 or fewer employees in Australia. That’s about 36.8 per cent of Australian businesses, according to ABS data. It is estimated that 584,744 businesses have one to four employees and the remaining 197,164 are businesses with five to 19 employees.

The ATO preempted the passage of this important legislation by contacting small businesses to inform them that they can start reporting if they have STP-ready software.  They also asked that businesses inquire with their tax practitioners if they have any questions.

In preparation for the roll-out, the ATO worked with digital accounting service providers to develop low-cost STP options for the micro business sector. It has since published a list of vendors who can provide low-cost solutions (less than $10 per month) and requires no more than minutes to complete each pay period.  It was a requirement that the solutions do not require the employer to maintain the software. Major accounting software providers Xero and MYOB have also announced their low-cost STP products, built for the for the micro business space, with one product for employers and another for tax and BAS agents.

ATO Commissioner Chris Jordan has given his “personal guarantee” that the agency will adopt a flexible and reasonable approach in dealing with the transition to STP for employers with 19 or less employees.  Recognizing the limited time to 1 July 2019, small businesses will be allowed to start reporting any time between 1 July and 30 September 2019.  While the official start date will not change, the 30 September extensions deadline aims to give employers more time to make the transition to digital reporting.

Further, there will also be no penalties for mistakes, missed or late reports for the first year.

“I want to reassure small [businesses] and give my personal guarantee that our approach to extending single touch payroll will be flexible, reasonable and pragmatic.”

If you need information on how to implement STP within your business please contact Semmens & Co.  We can provide you with training on how to set up STP reporting, with accompanying work instructions, to ensure you can meet your compliance requirements from 1 July 2019.

Need help?  Call Semmens & Co for more information on 03 8320 0320.

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Mark Semmens

Mark is a Chartered Accountant with a wealth of experience in accounting and taxation. Mark is a Member of Chartered Accountants Australia and New Zealand, the Tax Practitioners Board and the National Tax and Accountants Association.

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Daniela Semmens

Daniela Semmens is a Co-Director of Semmens & Co. and joined the company as General Manager in 2017. Daniela is an Affiliate Member of Chartered Accountants Australia and New Zealand and also a Member of the Australian Institute of Project Management.

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