The Australian Government is implementing a new tax and superannuation reporting tool for small businesses that will take effect Monday, 1 July 2019.
Small businesses will be required to implement a Single Touch Payroll (STP) system that will immediately report tax and superannuation contributions made to employees to the Australian Tax Office (ATO).
The ATO understand that this is a significant transition for small business, particularly those who do not currently use payroll software. Therefore, they have special arrangements to support small businesses making the transition.
If you employ four or less employees you have additional support options to assist you during this transition. For instance, you may be permitted to rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each payroll.
It’s important you familiarise yourself with the ATO’s STP requirements, however we have tried to answer some of the main questions coming from the small business community in our Frequently Asked Questions.
Frequently Asked Questions
Am I considered a small business / small employer?
If you employ 19 or less employees you are considered a small business or small employer.
What STP software is available?
Fortunately for small business owners there are a number of STP software options available in response to these changes. There are free and low-cost STP software available that adheres to the ATO’s strict guidelines, so it doesn’t need to be a significant expense to the business.
How do I know the STP software I have chosen is approved by the ATO?
A register is maintained by the ATO on accredited software which you can access here: https://www.ato.gov.au/business/single-touch-payroll/in-detail/low-cost-single-touch-payroll-solutions/
To determine what software best suits your business, the ATO recommends that you consult with your accountant or registered tax agent.
Why is this occurring?
STP will ensure all employees receive their full superannuation entitlements.
The STP will also improve transparency and modernise business reporting for the 21st century. STP has already been rolled out to large employers (those with 20 or more employees).
With the ATO receiving all payment and superannuation contributions directly from employers it will also make it easier for individuals to lodge their tax return and they will not have to wait for their employer to issue a payment summary to do so in most instances.
What is the deadline for me to implement STP?
Small employers can start reporting anytime from 1 July to 30 September 2019. Deferrals will be granted to small businesses who request additional time to start STP reporting.
If you are experiencing hardship, or in areas with intermittent or no connection the ATO may exempt your business from STP reporting.
What happens if I make a mistake in STP?
The ATO has allowed time for small business owners to familiarise themselves with STP. No penalties for mistakes, missed or late reports will be made for the first year.
For general business support connect with our Business Support Team on 08 8254 4666.
- Single Touch Payroll – https://www.ato.gov.au/Business/Single-Touch-Payroll/
- How to prepare for Single Touch Payroll – https://www.asbfeo.gov.au/news/news-articles/how-prepare-single-touch-payroll
- Low cost Single Touch Payroll solutions – https://www.ato.gov.au/business/single-touch-payroll/in-detail/low-cost-single-touch-payroll-solutions/
This blog has been created from information made publically available by the Australian Tax Office and Australian Small Business and Family Enterprise Ombudsman.