Small businesses may miss out on $100 discount for using Single Touch Payroll system

Kelly O'Dwyer

Kelly O'Dwyer supports criminal penalties for serious exploitation. Source: AAP Image/Mick Tsikas.

Small businesses may not receive a tax offset for using Standard Business Reporting Software as part of the federal government’s Single Touch Payroll (STP) system.

The $100 rebate, which was to be available from July 2017, was first announced by former small business minister Kelly O’Dwyer in December 2015, alongside an announcement that the government will conduct a pilot of the STP system in the first half of 2017, which will focus on small businesses.

However, while the government’s Budget Savings (Omnibus) Bill 2016, introduced into parliament this month, contains provisions for the implementation of the STP system, the tax offset for small businesses is not included.

SmartCompany has been told that earlier drafts of the Omnibus Bill did contain the tax offset for small business.

Representatives for O’Dwyer, who is now the minister for revenue and financial services, have been unable to confirm to SmartCompany that the tax-offset will proceed, with SmartCompany only told that “consultation” on the offset has occurred.

“The government’s consultation on the Omnibus Bill included consultation on the tax-offset incentive for early participation in Single Touch Payroll by small business,” Minister O’Dwyer said in a statement provided to SmartCompany.

“The government is proceeding with a pilot, which will commence later this year.

“Following the pilot, the government will consider next stages of implementation.”

It is not clear if the pilot will include the tax-offset.

The non-refundable tax offset was to be available to businesses with turnover of less than $2 million for software purchases or subscriptions made in the 2017-18 financial year. O’Dwyer said in December 2015 the offset was intended to “assist with the transition” to the STP system.

The STP system was originally slated for commencement in July 2016. Under the scheme, electronic accounting software used by businesses would automatically report payroll information to the Australian Tax Office when employees are paid, eliminating the need for employers to report employee-related Pay-As-You-Go withholding in activity statements throughout the year or employee payment summaries at the end of the year.

The original scheme had included a requirement for businesses to make mandatory real-time payments, however, former small business minister Bruce Billson said in June 2015 the government would not proceed with that aspect of the scheme and would instead consult further with industry.

The ATO confirmed in October 2015 it was pushing ahead with plans to introduce mandatory real-time payroll reporting.


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5 years ago

The original concept of the $100 offset as a once off incentive for small business was not going to happen in the time frame that small business “needed” to get involved in Single Touch Payroll. It was also a one off payment that there could be no real compliance or surety measures around. We were part of the consultation that suggested this very small incentive be removed for now and that something should be developed that was relevant and worth actually providing some real benefit to SME’s. (to be frank the original concept of the $100 was insulting).