As a small-business owner, you would have heard by now about the Australian Tax Office’s new “single touch payroll” or STP reporting function. It is the new way all Australian business owners will be required to report their PAYG and super information to the ATO every payroll.
If you’re unsure whether your business is compliant there’s still time, but you need to act quickly as the deadline is fast approaching. Here’s everything you need to know to make sure your business is ready for the STP rollover on 30 September.
If you employ less than twenty people, your business must be STP compliant by the end of September – larger businesses already made the switch in July 2018. Your employee headcount must include full-time, part-time, casual, overseas and seasonal employees as well as all those on leave.
Your payroll processes won’t change, but you will be required to submit additional information to the ATO, such as superannuation, every payday instead of reporting monthly or quarterly.
If you use a software provider to process your payroll, check that they are STP compliant as it is not their obligation – it’s yours. They will need to grant authorisation on your behalf to report to the ATO at each payroll so, if your software provider is not STP compliant you will need to change them. Outsourcing your STP to a trusted provider is a worthwhile investment, as you’ll rest easy knowing all the fuss of reporting is taken care of.
STP will help businesses streamline the reporting process. This means at every ‘pay event’ or payroll, employers are now able to automate how they provide important PAYG and super information to the ATO. Reporting at each payroll means you won’t have to submit an annual PAYG report at the end of the financial year.
You will still need to submit business activity statements (BAS), but through STP these will be pre-filled to eliminate double handling and potential errors.
Also, you won’t have to generate payslips for your employees as these will be automatically available through MyGov, where you’ll also be able to access tax file declaration numbers and super choice information when onboarding new starters. Gone are the days of messy paperwork!
Before 30 September, check all of your manual and automated payroll processes, reviewing everything from onboarding to termination to ensure they’re in line with STP requirements.
Every business owner will have a Business Portal through the ATO where you can communicate key information. To access the portal, you can apply for an AUSkey, which is a unique, secure login allowing you to get into the ‘access manager’ section of the portal. Here, you can assign and manage permissions for your employees. The ATO automatically matches STP information to employers and employee records, making it easy for your staff to see year-to-date tax and super information online.
Double-check the pay codes as well as configurations you use to pay your staff their wages and entitlements. Be sure to jump on any discrepancies so once you go live, your systems are all in neat, working order.
With all the finer details of STP, it can seem like a complex and overwhelming prospect to make your business compliant, especially in such a short amount of time. However, investing in compliance is the best money your small business will spend, freeing up your time in the long-term so you can carry on growing your team, and bettering your business with confidence.
Ben Thompson, Co-Founder and CEO, Employment Hero