Hundreds of thousands of micro-businesses may be allowed alternative reporting mechanisms under the Single Touch Payroll regime, which is set to come into effect for small business next year.
The next STP deadline is 1 July 2019, for employers with 19 or less employees. Legislation mandating this deadline is still before the Senate, but the ATO advised best practice is to prepare for rollout as per the deadline.
However, the ATO acknowledged that some micro-businesses may not require payroll software, and is currently looking at alternatives for those entities.
“There's a larger cohort of what we would call micro employers, less than five, who don't currently use a payroll product. Our clear message to those is that we won't force businesses to take up payroll to do STP. We'll be working with industry to look at some alternate reporting mechanisms,” the ATO’s STP lead and assistant commissioner, John Shepherd, told My Business' sister title Accountants Daily.
“That was a learning from the pilot that we did with small business last year. The finding of that was that not all small employers would want to take up a payroll product, and also, the need to have low cost products available for that reporting,” he said.
Figures to April 2018 indicate about 700,000 employers will be required to start STP reporting in July next year. The ATO anticipates a wave of deferrals and exemptions for that deadline, assuming the legislation is passed.
“We don't expect that they're all going to start by July 1. That's a lot of employers to support. So, we'll be working with industry around that flexibility, around things like deferrals,” Mr Shepherd said.
Employers in remote communities with limited IT infrastructure and internet access will also have their situations considered.
“If you're in an area that has internet issues or internet challenges, there are exemptions available for STP. We acknowledge it's really hard if you've got no internet to send reports to us each payday,” Mr Shepherd said.
“Through [a] focus group, we’re working with industry on some flexible options to transition that group over the next couple of years,” Mr Shepherd said.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.