ARE YOU STP READY?

 In Accounting & Business Advisory, News, Uncategorized

Single Touch Payroll (STP) is an initiative being introduced by the Australian Tax office (ATO) to align employer’s reporting obligations with their payroll processes. As of 16 September 2017, STP has become a legislative requirement for business across Australia. Not since the introduction of PAYG in 2000 has a piece of legislation had so much impact on employers and employees in Australia.

 

What is Single Touch Payroll?

  • STP will affect the way employers manage their payroll process. Employers must report earnings, tax and super information through STP-enabled payroll solutions each time they pay their staff.

How will Single Touch Payroll affect your business?

  • There will no longer be an end of year reporting requirement for payroll, rather employers will report all salaries, wages, allowances, deductions, PAYG withholdings and superannuation at the same time they pay their employees – you’ll be reporting every pay run (and possibly paying those obligations each pay run too)
  • From 1 July 2018, small and medium business will have their W1 and W2 labels prefilled on their Business activity statements. Larger businesses will no longer have to report PAYG withholding on their business activity statements at all.
  • Reporting via STP will mean employees can access current tax and superannuation details via their myGov accounts at any point in the year – Employers may no longer need to supply payment summaries.

When does STP take effect?

  • Employers with 20 or more staff as at the 1 April 2018 will need to start reporting through STP as of 1 July 2018
  • Employers with 19 or less employees have until 1 July 2019 before STP reporting is mandatory, though you can begin reporting earlier if you are ready.

What can you do to make sure you are ready for STP?

Get your information together

  • Will your current Payroll solution be STP/SBR Ready?
  • How will you submit STP reporting to the ATO?
  • How will you receive STP Files from the ATO?
  • Are you correctly paying your staff and calculating PAYG and Super liabilities?
  • What HR and IT processes might need to be re-evaluated?

Assess your readiness

  • Review all your HR and payroll processes from new-employee onboarding through to termination – do your current processes accommodate the STP legislation and requirements?
  • Can you effectively manage the increased compliance obligations of payroll on your own or should you outsource to a professional payroll vendor?

Not sure where to start?

MWL Accounting can undertake a comprehensive review of your current payroll systems and processes and guide you in the right direction. Call us MWL for an obligation free chat about how we can help you get compliant.

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