Finance, Single Touch Payroll

With 12 days to go, just half of Aussie small businesses are ready for STP

Matthew Elmas /

Unfair dismissal

Australian small and family enterprise ombudsman Kate Carnell.

Twelve days out from the end of the tax office’s grace period for single touch payroll reporting, about half of small employers required to adopt the scheme have signed up.

The Australian Taxation Office (ATO) released figures earlier this week revealing more than 350,000 small businesses (those with between one and 19 employees) are reporting under STP,  more than double the number reporting at the July 1 official implementation date.

After September 30, small employers which haven’t signed up for STP reporting, or have no withstanding deferral or exemption, will begin being contacted by the ATO.

The tax office has said it will approach STP compliance with a light touch for the first twelve months, with no penalties for mistakes, missed or late reports.

However, the tax office has clarified that there may be penalties for employers who refuse to engage with STP reporting.

Increasing by about 715 employers each day through the week ended September 15, the rate at which small employers were signing up for the scheme earlier this month appears to have slowed from the average rate of about 5,368 firms per day between late-August and early-September, ahead of an expected spike next week.

ATO deputy commissioner James O’Halloran said in a speech on August 21 there were “over 243,000” small firms reporting under STP, while figures provided by the ATO dated to September 9 reveal 345,000 had signed up.

The tax office expects a sign up spike in the days leading into the end of the grace period, encouraging firms which may not be ready to assess alternative options, such as quarterly reporting deferrals for micro-employers (one to four workers).

“Regardless of whether you’re ready to start reporting, or if you still need more time to get ready, there are options available to you,” assistant commissioner Jason Lucchese said in a statement circulated Monday.

“The commissioner of taxation, Chris Jordan has reassured small employers that the ATO’s approach will be flexible, reasonable and pragmatic with no penalties for mistakes, missed or late reports for the first year,” he said.

Uptake of the tax office’s quarterly deferral program has been skim, while micro-employers have previously been considered the group facing the highest barriers to becoming STP ready, just 17,800 had applied for deferrals by September 4.

About 15,000 of those applications (3.5% of employers participating) had been granted by the same date, while 864 exemptions had been granted.

Survey data put together by cloud accounting company MYOB in June found less than half (41%) of businesses with between two and four employees had not heard of STP, while only 17% of businesses with one worker said they were aware of the scheme.

The ATO has been undertaking a nationwide advertising campaign to encourage sign ups for STP reporting and the looming September 30 deadline in recent months, although its efforts to increase the awareness of the scheme were restricted in part by Australia’s political calendar.

It comes as other small business groups move to remind employers about STP reporting requirements, with small business ombudsman Kate Carnell yesterday saying uptake in reporting numbers has been encouraging.

“It’s encouraging to see the number of small businesses reporting through STP has more than tripled during this transition phase, from around 100,000 to 350,000,” Carnell said in a statement circulated Wednesday.

“However there are many small businesses that have not yet made the move and they really need to.”

This article was updated on September 30 at 12:00PM AEST to reflect an update to the ATO’s media release. 

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Matthew Elmas

Matthew is the news editor at SmartCompany. You can contact him at [email protected].

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