Single Touch Payroll (STP). It sounds like something that would only be of interest to you if you were looking for payroll technology. In fact, the apparent ambiguity of this term may be the reason that 43.3 per cent of business decision-makers who employ more than 20 people told SmartCompany* they have never heard of the mandatory system that takes effect 1 July 2018, while 32.9 per cent say they’re aware, but are yet to do something about it.
This is a fairly daunting statistic when you consider that ATO assistant commissioner John Shepherd warned businesses that there are no excuses for not being ready.
There are, however, ways around this if your payroll software provider has requested an extension. “Some payroll software providers have asked us for more time to get ready,” Shepherd acknowledged.
“Employers should ask if their provider has been given a deferral which will cover them, and also check when their product will be updated to offer Single Touch Payroll reporting,”
With our poll revealing that just 23.7 per cent of businesses employing more than 20 people are ready for the 1 July change, and only a few weeks remaining, now is the time to talk to your payroll software provider about what you need to do to meet your STP obligations.
So, what is Single Touch Payroll?
As the ATO explains, Single Touch Payroll is a system that will align your reporting obligations with your payroll processes. Essentially, this means reporting payments such as salaries and wages, pay as you go (PAYG) withholding and superannuation information from your payroll solution each time you pay your employees.
For some businesses, this can mean less flexible payment times and requires a review of payroll systems and processes to ensure the requirements of the new system are met. However, the end product should streamline your payroll reporting, saving you time in the long-run.
While Single Touch Payroll is compulsory for businesses with more than 20 employees from 1 July this year, the system is likely to be be rolled out for all businesses from 1 July 2019.
With our poll showing just 26.6 per cent of businesses with fewer than 20 employees are aware of this requirement, there are many out there who may have a lot of catching up to do before the 2019 financial year.
* Our SmartCompany poll captured data from 303 decision-makers within small businesses, 101 of which have more than 20 employees.
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