STP is now a requirement for all businesses – Here’s what you should know
Yes, we thought this was going to have happened already, but it seems Single Touch Payroll (STP) legislation has finally passed, meaning all businesses are required to submit payroll data every pay run as of 1 July this year.
Sound like a bit of a headache? Well, STP could well be a problem for business owners that refuse to take note, but for everyone else the impacts will be relatively minor.
The change will see Australia’s 782,000 businesses with 19 employees or less required to begin reporting via STP-ready software, which begs the question: how many are currently using said software?
For the past few years, tech-savvy business owners have realised the efficiency gains offered by the world of online accounting and payroll software, giving up the complexity of more manual solutions, which are notorious for introducing complexity and errors into bookkeeping.
But there will be plenty of business owners still processing pay through a series of spreadsheets and paper files. For them, STP is likely to be the straw that broke the donkey’s back.
STP in a nutshell
Employers with any number of staff will now need to report payments such as salaries and wages, PAYG withholding and super information electronically to the ATO directly from their payroll solutions at the same time they pay their employees (for many this is fortnightly or monthly, but some businesses may still do a pay run weekly).
The result is that employers won’t need to complete payment summaries for their employees at the end of each financial year, as the payroll information would have been reported to the ATO at regular intervals throughout the year.
It also means a raft of payments that needed to be processed manually can now be done automatically, assuming you’ve acquired the right software for your payroll needs.
For others, attempting to complete this reporting regularly will become incredibly cumbersome without the help of a BAS agent or a payroll management firm with the requisite software.
So, what can you do to get ready? First, make sure you are using a payroll solution that is STP ready.
After that, read this article to begin learning how to process your first STP pay run.