On September 30, 2019, small businesses with 19 or fewer employees will be required by law to transition to single touch payroll.
Single touch payroll (STP) requires employers to send employee payroll information — including wages, salary payments and superannuation — to the ATO at the same time as their standard pay run.
The deadline to report is just around the corner, but almost half a million small businesses are yet to make the switch.
Sam Allert, chief executive officer of accounting software provider Reckon, says barriers such as a lack of education or existing accounting software, time and budget have deterred small businesses from making the transition.
“Many of these businesses, particularly micro-businesses with one to four employees, simply don’t use accounting or payroll software,” he says.
“Technology isn’t their forte and current solutions on the market are too costly and complex for their needs.”
Making the transition to STP simple
There are simple solutions for small business owners who are yet to transition but don’t have accounting software in place. Mobile apps can make it quick and easy for busy owners to report anywhere, anytime.
“Our free single touch payroll app allows businesses to submit their payroll information to the ATO from their mobile in minutes,” Allert says.
Since launching in late-May, Reckon’s app has amassed almost 30,000 users, more than 85,000 pay run submissions and over $300 million in payroll reported to the ATO.
For Raeleen Kaesehagen, founder and chief at Mudputty, online accounting software has made the transition to STP simple.
“When I first read about STP, I was a little underwhelmed at the idea of ‘another’ thing that needed to be done,” Kaesehagen says.
“With accounting software already in place, the transition was easy. It was just a matter of running the payroll in the software then clicking a button to send it to the ATO.”
Susie Campbell is the founder of Hullaballoo PR, and agrees transitioning to STP was far easier than she had anticipated.
“I implemented STP earlier this year. There were no barriers whatsoever. It was really simple and I questioned why I had thought it was going to be difficult and time-consuming,” Campbell says.
“It probably took me 15 minutes including the call to the ATO to confirm it all.”
Avoid fines with the touch of a button
Fines will apply for non-compliant businesses from June 30, 2020.
ATO assistant commissioner Jason Lucchese says small businesses can’t afford to put off their compliance obligations any longer.
“Find a solution now. For your next pay run, you need to submit your payroll and STP report to the ATO,” he advises.
Lucchese says the easiest way to do that is to turn to online accounting solutions.
“We recommend you take this opportunity to update your [accounting] solution to efficiently manage your payroll, employees and be STP compliant — all from one place,” Lucchese says.
“For those businesses not accustomed to using accounting software, we have made it even easier with the release our free STP mobile app,” Reckon’s Allert says.
Campbell agrees, saying the whole process “is very simple and takes minutes” with accounting software.
“My advice to small businesses with employees: accounting software is essential and will save you heaps of time and stress. It’s a simple touch of a button for each staff member” she says.
STP is already making life easier for Campbell and her staff.
“My employees find it easier as all their tax info is now within their MyGOV account. Before, they had to wait for me to send them a payroll summary. I was so pleased when I was told that with STP, I no longer need to do it,” she adds.
Reckon helps small businesses grow with affordable accounting and payroll solutions that take the headache out of admin. And now with our free mobile app, we make it easy for businesses to get STP ready.