Legislation passes for Single Touch Payroll for all Australian businesses

Last month it was legislated that Single Touch Payroll (STP) will be extended to employers with 19 or fewer employees, starting from 1 July 2019.Single Tax Payroll legislation

This means that no longer will any business be reporting their payroll activity once a year to the ATO, instead every business in Australia will need to send a report after each pay day.

Cost to your business

According to the ABS data, there are approximately 782, 000 businesses with 19 or fewer employees in Australia, that’s about 36.8 per cent of Australian businesses.

However the ATO Commissioner has pledged to support businesses in this transition to STP.  In preparation of the full rollout, the ATO has been working with digital service providers to develop low-cost STP software options and for the micro business sector. The ATO has a published a list of providers offering low cost solutions, costing less that $10 per month.

Changes to payroll

Small businesses used to finalise their payroll records at the end of the financial year and produce:

    • a payment summary annual report for the ATO, stating how much the business had paid in salary or wages, the PAYG withheld, and some superannuation contributions they’d made.
    • a payment summary for each employee, stating what each employee received in wages or salary, the payroll taxes collected from their pay, and some superannuation contributions made on their behalf.

With STP, the payment summary annual report and the payment summary will go away.

No more payment summary annual reports

Because you’ll be updating the ATO on a pay-by-pay basis, you won’t need to prepare a payment summary annual report anymore. You’ll just let the ATO know when you’ve made your last pay run of the financial year for your employees.

No more employee payment summaries, either

Payment summaries won’t need to be sent to employees anymore, so employers won’t be required to produce them. The ATO will use single touch payroll reports as the sole record of salary/wages paid, taxes collected, and superannuation contributed.

Employees will be able to see the information that would normally be on their payment summary by logging on to myGov.

Update your payroll skills

Applied Education have short courses on Payroll and Taxation and advanced courses on MYOB and Xero. Or talk or one our course coordinators on 1800 678 073.

 

 

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