You really have to give credit to the accounts team in any business. Not only do they make sure everyone gets paid, but they deal with tax, superannuation, government rule changes, and a tonne of other issues.
Of course, for some businesses, the owner is also the payroll person. This increases the stress even more and puts pressure on the entire business.
The hope is that with new legislation to Australian businesses it will make at least some aspects of processing payroll simpler and less stressful.
Streamlining the Payroll Process
As of 1st July 2019, all Australian businesses will move to mandatory digital payroll reporting.
This process is known as Single Touch Payroll (STP) and according to the Sydney Morning Herald, it’s “one of the biggest changes to business operations since the GST.”
This ruling has already been in place for larger businesses (with over 20 employees) since 2018, and now it is mandatory for all businesses.
Businesses with 5-19 employees have until 30th September 2019 to begin reporting. Businesses with 1-4 employees have the option to report quarterly via a BAS/TAX Agent rather than each time they run payroll until 30 June 2021.
The idea behind Single Touch Payroll is to have clearer records for both the Australian Tax Office (ATO) and the employees. With the new system businesses and individuals can now track their payroll records in real-time via my.gov.au
How Does Single Touch Payroll (STP) Affect Small Businesses?
According to the ATO, this STP process should simplify how businesses report their employees’ tax and super information.
The digital format will eliminate double handling and any potential errors that may occur along the way.
Businesses already using STP Compliant payroll software like Xero, QBO, or MYOB will find the process for Single Touch Payroll reporting straight forward.
The ATO currently lists all the STP compliant software products on their website.
These STP compliant platforms will send the ATO reports which include the information needed from your business: salaries and wages, pay as you go (PAYG) withholding and superannuation information.
The software will also give the ATO real-time data about your employees and ensure that businesses fulfill their superannuation and tax obligations for their employees. This better protects the rights and remuneration for all employees in Australia.
Getting Setup for Single Touch Payroll
Between 1st July and 30th September 2019, all businesses with less than 20 employees will need to adopt STP compliant payroll software.
Once set up, the software will guide you through the process of reporting and take care of the online submissions. This update will make running and reporting payroll a lot simpler, using a single touch.
Need Help Getting Setup for Single Touch Payroll?
Although adopting new technology can feel stressful at the time, there’s no doubt that the changes make business and life more efficient. The benefit will be a more streamlined, accountable, and trackable reporting system for everyone involved.
No doubt, in a few years, we will all look back at the new STP rules and see that it helped make payroll less stressful and gave us time to focus on other tasks.
If you need assistance with getting set up for Single Touch Payroll, we are here to help. Centegrity have over 12 years of experience assisting businesses with bookkeeping and business mentoring.
Get in touch by filling in the form below.