With the Single Touch Payroll start date for small businesses just around the corner, the ATO has warned many operators remain non-compliant and that could mean logistical headaches in the future.
If you’re a business owner and now is the first time you’re hearing about Single Touch Payroll (STP), it’s time for you to act quickly.
That’s because, as of last year, STP became mandatory for all businesses with 20 or more employees and, as of 1 July this year, all businesses need to start reporting it.
Available through payroll, accounting and business management software, STP is a faster way for employers to report tax and super information to the ATO.
Unlike in the previous reporting method, whereby this information was lodged with the ATO once a year, STP is reported every time you perform a pay run.
Not only does STP reporting make paying employees more transparent, doing this will make many businesses more streamlined in their payroll processes – an issue that currently hampers many small employers’ performance.
According to recent data from the ATO, around 50,000 small businesses (employing between one and 19 people) are currently up to speed with STP.
But they estimate the total number of these businesses to be around 750,000 across the country, meaning 700,000 microbusinesses are unprepared for the 1 July STP start date with one month left to go.
So, if you believe you’re one of the 700,000, what can you do to avoid the pain that comes with leaving a compliance hurdle for the last minute?
First things first: check whether you’re already set up.
If you’ve outsourced your payroll process, chances are your payroll vendor is good to go. A quick phone call should verify this.
If you’re running payroll with the help of a bookkeeper or part-time administrator of any kind, you’ll want to discuss your STP compliance status with them.
Finally, if you’re running each pay run yourself, and you’ve never heard of STP (or you have but you’ve not done anything about it), then it’s time to get started. Today.
While getting set up with STP-ready payroll or accounting software isn’t difficult, you want to give yourself as much time as possible to make certain there’s no need to panic at the 11th hour.
This is because mistakes happen, but also because you want to take your time in choosing the correct software for your needs.
STP-ready software exists at all levels of business software, catering for businesses of just a couple of employees to many thousands.
If you are one of the 700,000 small businesses yet to become STP-compliant, and you have less than four employees, chances are you’ll need only the most straightforward, low-cost payroll solution to get you started.
Luckily, these options are available, and are on the market for as little as $10 per month.
But, there’s an exception to this rule if you happen to be eyeing significant growth soon. Remember, the payroll solutions available for microbusinesses are designed for up to four employees only.
This means if you’re likely to be putting on more staff due to growth or the seasonal nature of your business, you’ll want to consider a higher tier of software to meet your needs.
Whatever the situation you’re in, if you’re not already set up for STP, your race to compliance has just begun.
Your shortcut to the STP finish line is right here. MYOB Essentials Payroll is STP-ready and costs just $10 per month, with everything you need to streamline pay runs for up to four employees.
Still not sure how or when STP will come into play for your business? Check out the ATO’s guidance on the topic here.