On 1 July 2018, the newest initiative from the Australian Taxation Office, Single Touch Payroll (STP) will come into effect. This new initiative has some business owners on edge, wondering if they will experience significant disruptions in their payroll reporting process.
Not every business will be affected by these changes and you might be an exception. Nevertheless, it’s better to know now, not in July, whether STP applies to your business.
The most significant change with STP is the reporting process, and more specifically how often you’ll need to report wages, salary payments, superannuation information and pay as you go withholdings to the ATO. The entire process is meant to be streamlined with this new legislation and employers with more employees will enjoy more convenience in their payroll administration duties.
How many employees do you have?
The number of employees you have is the most important deciding factor of whether STP will affect you. According to the legislation, if you employ 20 employees or more as of 1 April 2018, then on July 1 of this year, you will need to begin using a payroll system that enables STP reporting. This will send your payroll information directly to the ATO and you’ll no longer need to provide employees with year-end payroll summaries.
What are your next steps?
If you’ve determined that you fall under the STP umbrella, you’ll need to ensure your payroll software is STP compliant in order for you to report your payroll to the ATO after July 1. Luckily, this process is not meant to make the payroll administration more complicated and should make it easier for you to pay your employees and report their earnings and superannuation to the ATO.
As with any change in your business practices, it might take some getting used to. If you need any help as you make the transition or need expert guidance, contact ABJ Business Solutions today for a free consultation.