Business owners: your top tax time and STP queries answered

In these challenging times, it helps to feel as prepared as possible for the things that are within your control. And when it comes to tax time, it pays to be organised. The last day of June was a big date in the process, but for many business owners, tax reporting is still top of mind.

Ever since Single Touch Payroll (STP) was introduced, tax time has been undergoing something of a makeover. This new payroll process is much more streamlined, which means that reporting key information to the ATO promises to be a simpler affair. But not only has STP transformed reporting process; it is also a central component for businesses seeking to qualify for the government’s JobKeeper payments. All of which makes staying on top of tax time more important than ever.

We’re sharing some of the most commonly asked questions from our small-business community – cutting through the confusion and connecting you with the resources you need to master all things tax time, STP and JobKeeper.

  1. How has STP affected the EOFY process?
    STP will facilitate a smoother and more streamlined year-end. This is because digital systems have ensured that the entire process is now more efficient, accurate and straight forward.
    Where you would previously report payroll information to the ATO once a year, you now send an automated report after every pay date through the use of enabled accounting software. As a result, any payroll discrepancies are now identified within the accounting software during each pay run throughout the year. This means that mixups are flagged before tax time and it is no longer slowed down by a backlog of errors.
  2. What’s happened to payment summaries?
    STP has removed the requirement for payment summaries altogether. Instead, the ATO now makes this information directly available to employees through their individual myGov accounts in an income statement. Payroll information will prefill automatically on 2020 individual tax returns prepared using MyTax or within the tax return software used by your tax agent.
  3. How does the removal of payment summaries affect the EOFY process?
    Now that employees no longer need to wait for payment summaries or group certificates, and accountants and bookkeepers no longer have the requisite 14 day window to finalise, reconcile and issue – EOFY is shaped up to be a much faster affair on all fronts.
  4. How can I send super and employee pay information via STP?
    After you’ve done a payroll finalisation via STP, technology will take care of this for you – the STP process will automatically send wage, super and PAYG information to the ATO each time a submission is filed.
  5. Do I need to file all pay runs for this financial year (including those before I opted in to STP)?
    Under STP, year-to-date information is included each time a pay run is submitted. This means you can file the most recently posted pay run and the data processed in previous pay runs will also be filed with the ATO
  6. Where do JobKeeper payments come into it?
    If your employees are receiving the JobKeeper wage subsidy and you are reporting via STP, JobKeeper payments will already be included in the STP finalisation. They will prefill on your tax return as part of ordinary salary and wages. If you’re not on STP, getting started is simple. Once you’re set up, head over to the ATO website to register your business for JobKeeper.

Still have questions? As always, you can find more information via the ATO or reach out to your accountant or bookkeeper.

Angus Capel, Small Business Advocate, Xero

No comments | be the first to comment

Comment Manually

Read more


FREE NEWS BRIEFS Get breaking news delivered