Many have heard the term Single Touch Payroll (STP) but it shouldn’t surprise you that there is still uncertainty as to what it’s all about and what the benefits are to employers and employees.
STP is a new framework where employers will provide payroll and superannuation information to the ATO at the time the payroll is created. It came into effect on 1 July 2018 for companies that employ 20 plus people. It’s the second biggest ATO initiative since GST was introduced in 2000 and despite this, I’m amazed to speak with many business owners who are still unclear about this change.
As a business owner, you’d be forgiven for putting this in the “too hard” basket, especially if you’ve received no how-to advice. That’s about to change as I’m going to share with you my top five business hacks to ensure your business is ATO compliant.
1. Get your house in order
Now is the time to make sure you’ve captured all the required information on your employees. It’s not acceptable to do this once a year. You need to have all their personal information on file when they commence employment with you as these will be electronically transmitted to the ATO when you go live with STP. This information includes:
correct legal name
tax file number
date of birth
superannuation spin number
superannuation membership number.
2. Review and audit your processes
Those who run a standard payroll where employees are paid a fixed salary will not have to do anything different from an internal process point of view. If you pay people based on actual hours worked via timesheets it will be in your interest to streamline this function to ensure there are no delays or adjustments that take place after the pay-run has been processed. What you’re trying to avoid is having to re-submit an electronic file to the ATO each time there’s an adjustment to a finalised pay-run.
3. Communicate with staff
Don’t assume your staff know about the new changes in reporting. Provide them with an information sheet on what the changes are (The ATO have a simple fact sheet just for employees). The key message to employees is that every Australian who is an employee needs to create a myGov account. Explain to them that Payment Summaries will now be available to them via their myGov account as well as other information that is available to them like amounts paid for superannuation. As an employer you’ll no longer need to issue annual payment summaries to employees once you have opted to lodge under STP.
4. Seek external advice
Remember that STP is now live for businesses with 20 plus employees and those that employ less than 19 will be required to do the same by 1 July 2019. If you’re still having troubles, it’s best to work with a bookkeeper or accountant who has experience with STP. It’s a small investment for a long-term gain.
5. Implement an online payroll system
If you want to take the hassle out of paying staff with a seamless and secure payroll solution that is STP compliant look at a solution such as QuickBooks Online. The integrated payroll solution from KeyPay comes with easy to use rostering, timesheets, expense management and inbuilt awards.