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The legislation has been passed and it’s now locked in. From 1 July 2019, all employers will need to say goodbye to the old tax and superannuation reporting for employees and hello to the new Single Touch Payroll (STP) as the Australian Taxation Office (ATO) changes the way tax and superannuation information is reported.
Although STP has been rolled out for businesses with 20 or more employees since mid-last year, recent legislation changes now mean that all employers need to be prepared to move over to STP within the next few months.
If you have less than 20 employees, this article will help you decipher exactly what you need to know, including important dates, what STP is and what to do if you need more time. Please keep in mind that if you would like more information on this topic, we are more than happy to have a phone call or meeting to discuss further… just book in a time using the link below.
- 1 April 2019: Headcount for the number of employees will need to be done.
- 1 July 2019: Employers with 19 or less employees (including micro employers) will need to be reporting through STP.
- 31 July 2019: STP will need to be implemented for all other employees of closely held entities.
- 30 September 2019: STP will need to be implemented for closely held employees.
What is Single Touch Payroll?
Single Touch Payroll (STP) is the new way to send through tax and super information to the Australian Taxation Office (ATO) with each pay to your employees. This is automatically done through your accounting software (Note – your software provider should be in contact once it is available for your platform and business as most are rolling out in stages). For businesses with 20 staff or more, reporting with STP is already mandatory (unless you’ve been granted a deferral). However, if you’re an employer with 19 or less employees, you have until 1 July 2019 to roll out STP.
I have More than 20 Employees
As mentioned above, if you’re running a business with 20 or more staff, then you should already have implemented STP for your payroll system or have completed a deferral request. If you have closely held employees, that is employees who are family members for instance, you also have an extension for finalising STP to 30 September 2019 for closely held employees and 31 July 2019 for all other employees of closely held entities.
I have Less than 20 Employees
If you make up one of the approximately 781,000 businesses in Australia that has less than 19 employees, according to recent ABS data, you have until 1 July 2019 to implement the STP. Software providers, such as Xero, are creating budget-friendly STP solutions at around $10.00 per month for those with fewer employees, some of which are already at market.
If you’re in a micro business (1-4 employees), special consideration has initially granted to help with the transition into STP. Your registered tax or BAS agent will be able to report quarterly, rather than with each payroll.
I Need More Time
If you’re wanting to request a deferral, you will need to be affected by one of the following challenges to get approval for an extension from the ATO:
- Unreliable or no internet connection
- Are unable to get ready by your software provider’s deferred start date
- Are transitioning to a new STP-enabled solution
- Are using a customised payroll solution and you need time to configure and test your updated product
- Have complex payroll arrangements and need additional time to transition to STP
- Have entered administration or liquidation
- Have been impacted by a natural disaster
- Are affected by other circumstances which are out of your control.
Alternatively, you can contact us at Walker Hill where we can assist with, not only requesting an extension if required, but ensuring that you’re ready to report through STP and it’s a seamless transition.