Single Touch Payroll (STP) is on the horizon for businesses with fewer than 20 employees, as the government has moved to make it mandatory. Luckily then, that it’s easy to jump on board and the benefits of doing so are huge.
The wonderfully titled Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 has been passed by both the House of Representatives and the Senate – and while it needs to go back to the House of Representatives, it is expected to become a reality.
The bill basically does a whole stack of things at once (particularly around superannuation reporting), but the real game-changer is Single Touch Payroll.
The Government had already agreed to make STP reporting mandatory for businesses with 20 or more employees for the current financial year.
It wanted to give smaller companies a little bit more of a grace period before it introduced the mandatory measure for them.
Should the law pass, businesses with fewer than 20 employees will be required to process payroll via STP from 1 July, 2019.
STP is a payroll reporting change.
Payments to employees such as salaries and wages, PAYG withholding, and superannuation information will be electronically reporting directly to the ATO from payroll solutions like MYOB.
Each time you pay your employees, you will need to report that information to the ATO.
Well, because it’s easier for the ATO, employers and employees.
The Government, on a range of fronts, has been pushing to make the way Australian businesses operate more digital and more streamlined.
It’s encouraging businesses across the board to take more electronic payments
Part of this is about making sure it’s harder for dodgy operators to avoid paying their employees superannuation and other payments.
But, it’s also about cutting out honest mistakes.
The ATO will be able to match up the information you provide to them during each pay run, and cross-reference that with the employees’ super fund.
If there’s a discrepancy, they’ll alert you.
The great thing is that instead of waiting until the end of the financial year, you’ll be alerted in real-time.
It means instead of finding you’ve been accidentally underpaying your staff’s super for 12 months or more and having a massive bill to face, any bill will be smaller.
But really, it’s about making life easier for employers and employees.
For example, instead of going through the song and dance of preparing a group statement at the end of each financial year – now all that information will be filed with each pay run.
Employees will be able to access all their relevant information through their MyGov account immediately instead of waiting for their employers to prepare the statement – which means they can file for their tax return earlier!
We’ve got a whole stack of resources designed to help you get ready for the big day.
The good news is that MYOB has been on the forefront of getting STP ready for bigger businesses, and we’ve processed over 640,000 pay runs (and counting!).
In fact, over half of all STP pay runs so far have been completed using a MYOB solution.
So, what next?
If you’re already an MYOB user, keep your eyes peeled to your email and product as we start to communicate the next steps with you.
If you’re not, you’ll need to upgrade to an STP-compliant payroll solution, such as MYOB.
But there’s nothing stopping you from reporting using STP as soon as possible.
If you already have MYOB Essentials or Account Right, all you need to do is complete a readiness assessment, connect to the ATO, and you’ll be right to go.
You can find out more about this process here.
Remember, it’s expected that you’ll need to file payroll using STP from 1 July, 2019. If you want to pay employees, you’ll need to do so through an STP-compliant payroll solution.
At the end of the day, this doesn’t need to be a huge headache for you or your business.
In fact, it’s going to make things way easier for you and your employees.
*NOTE: An original version of this post stated the legislation had been passed, but this is not the case*