Promoted by MYOB.
For businesses employing 20 or more people, whether they are full-time roles or otherwise, Single Touch Payroll (STP) is now a requirement, enforceable by the ATO.
STP represents a change from reporting payments like wages, pay as you go (PAYG) withholding and superannuation information once annually to reporting them every time you pay employees.
The ATO mandated that businesses with 20 or more employees must ensure their payroll processes are STP-compliant as of 1 July 2018, and it’s only a matter of time before they start catching up with those who aren’t. (If you have less than 20 employees, the good news is that you still have until 1 July 2019 to get up to speed.)
For Amanda Gascoigne, a Chartered Accountant running her own financial consulting company, the switch to STP doesn’t represent another complication from the ATO, but should instead be seen as an opportunity for businesses and their financial advisors to get up to speed with modern technologies and processes.
“I hear so many businesses and advisors still using old outdated processes when it comes to their bookkeeping and accounting, yet in all other areas of their business and their life they are embracing technology,” said Gascoigne.
“I believe STP can be the impetus for change – to modernise and streamline many business processes to free up time and increase profitability.”
By reporting employee-related payments more frequently, the ATO hopes to generate the following outcomes:
- Greater visibility of employee entitlements
- Streamlining of employee reporting to the ATO
- Availability of real-time information
- A level playing field for all employers
Make life easier for your payroll officer
Becoming STP-compliant may require businesses to change key payroll-related software and processes, which may in turn require a discussion with any accounting and bookkeeping firms they work with.
According to Pam Chilman, MYOB Certified Consultant at AMC Training Centre, some businesses are dragging their heels on all things STP, which will create major headaches for their payroll officers.
“Having conducted a number of training sessions on STP readiness, there’s a general feeling among the business community that being compliant is going to be a simple, ‘push-button’ exercise,” she told The Pulse. “But that isn’t the case.”
Chilman said that once businesses are set up for STP, the process will be painless. But getting the setup right from the get-go will be a reasonable amount of work.
The steps that businesses must ensure their payroll officer has undertaken is straightforward:
- Update payroll software to the STP-ready version
- Seek training and advice
- Complete your headcount
- Use clear, simple payroll categories
Other than making sure the company is using STP-ready software, the last point may be a problem area depending on the complexity of the business.
Figuring out the payroll categories may take time for payroll officers.
“Those categories include normal hours worked, overtime, commissions, tax, super – all the components that make up a pay cheque,” said Chilman.
“Now, your software probably has some great tools to help you achieve that. If you’re working for a large, complex organisation, you may have some hundred or so payroll categories to nominate.
“That’s going to take some time.”
In short, if you’re a business owner and this is the first time you’re hearing about STP, then you’ll want to make sure both your payroll officer and any other resources working your books have heard of it.
Having the right payroll solution in place also goes a long way for making a seamless transition to this new form of payment reporting and the good news here is that MYOB have already enabled STP in both its enterprise business software, like MYOB Greentree, and small to medium sized business solution AccountRight.
Now there are no excuses for being up to speed on STP.
ATO’s 37% tax on Christmas festivities
By George Morice
Performance anxiety not just a bedroom thing
By Dr Louise Mahler
Accommodating older workers ‘not hard, just different’
By Kim Seeling Smith