How it Impacts the Employer’s Payroll Process
Single Touch Payroll will entirely change how all businesses report their activity to the Australian Tax Office. With Single Touch Payroll, businesses will report their payroll activity digitally after every payday instead of once every year.
Previously with the former payroll reporting method, employers would send a payment summary report for their individual employees annually. They would do so along with taxes and superannuation contributions that had been made.
With STP, annual reports and payment summaries will be done away with in favour of reports given every payday.
With Single Touch Payroll, employers will be able to provide a more accurate report of the salaries of their employees more often. This will help business owners keep a more up-to-date record and float in today’s economy. stay afloat in today’s economy.
FAQs About Single Touch Payroll
With the new STP method being implemented into the payroll report system, there will be important questions about how it will affect businesses.
Here, we will answer some of the most frequently asked questions.
What exactly is Single Touch Payroll and how will it benefit employers such as myself?
As stated, Single Touch Payroll will dramatically change the way employers report their information to the ATO. Employers will submit their reports more frequently than they did before. Now, they will submit their reports after every payday instead of once a year.
Another aspect of the new STP implementation is that employers must also include information about super contributions, which was not formerly required.
When will it come into effect?
For employers that have 19 employees or less in total working for their business, STP will become effective by July 1st, 2019. To confirm how many employees you have working for you, you will need to carry out a headcount. For employers with over 19 employees, they should have been reporting via STP since 1 July 2018.
How will Single Touch Payroll benefit me as an employer and how will it impact my payroll?
Single Touch Payroll will simplify the process of sending your payroll information to the Australian Tax Office as an employer. It will leave little to no room for mistakes during the process.
The BAS will be automatically filled out for employers by the Australian Tax Office, so the potential for errors will be erased.
As for affecting your payroll, nothing will be changed about how you go about processing and submitting your information.
You will have to be certain that your software provider is capable of supporting single touch payroll by the date it goes into effect, or else you will need to switch to a provider that does.
Other Impacts
The Australian Tax Office is implementing Single Touch Payroll into over 700,000 businesses, both below and above 19 employees.
The STP process has been mandatory for businesses with over 19 employees for a little over a year now and the Australian Tax Office is now working to make this process mandatory for smaller businesses as well.
Smaller businesses are being empowered to get ahead of the game and switch to a single touch payroll as soon as possible before the process becomes mandatory for all businesses.
This dramatic change will be one of the biggest steps for smaller businesses. This is because it eliminates the possibility of errors within the payroll submission process.
The Single Touch Payroll will require a much greater amount of accuracy upon submission, which will very likely have a big impact on employers. It could be detrimental to your business and to your employees if you are incapable of preparing for the changes that the single touch payroll will cause.
Your Options
You will have the options of online or desktop software or spreadsheets. Online software should be automatically able to handle the job for you.
For desktop, you will need to find a service that will be able to create and format your report correctly for submission. If you are using spreadsheets, you will need to find a service that will be able to transcribe the information digitally for submission.
Call us now at Stellar Accounts to see how we can assist you. We welcome any enquiries about STP and we are always here to help.