SMEs are being urged to “rip the band-aid off” and begin reporting sooner to make the transition to Single Touch Payroll less painful, just as a poll suggests the name of this reporting measure is causing confusion among SMEs.
Employers with 19 or fewer employees are due to begin using the Single Touch Payroll (STP) reporting system to report payroll and super information from 1 July, joining larger employers which began using the measure at the same time last year.
There is also a 12-month exemption for closely held payees (including immediate family members).
Despite these extensions and waivers, George Morice, director of financial and business advisory firm Prime Partners, suggested that waiting only makes the transition more drawn out and cumbersome.
“Just rip the band-aid [off],” he said during a panel discussion on the My Business/Accountants Daily end of financial year webcast.
“You’re going to have to do it. Rip the band-aid off, get it done and then you don’t have to worry about it again.”
Mr Morice said that technology has advanced enormously in recent years, making the transition to digital reporting much more straightforward than it would have been even in recent years.
“The industry has changed so much that this would have been impossible to implement 10 years ago, it would have been a nightmare. But you have really great providers that have come in and have streamlined the system so much,” he said.
“A lot of what we do is trying to integrate technologies like these into our business clients, because it changes payroll from a painful thing into a three-minute exercise, and STP is just an extension of that.”
Intuit Quickbooks’ senior solutions engineer, Grant Quick, agreed that trying to defer STP reporting until the end of the three-month grace period “is not something we recommend”.
“There’s been a long tail already to allow people to get STP compliant. It is something that’s very easy to do,” he said.
“So, although the ATO is requiring it as of July 1st, they’re not going to be chasing people down for a few months.
“You do have a little bit of flexibility, but be warned: I wouldn’t be leaving it to the last minute.”
Name causing confusion
It comes as MYOB revealed apparent confusion between the name “Single Touch Payroll” and the compliance requirements attached to it.
The software provider polled 520 small businesses and found that while some two-thirds know that 1 July marks the start of digital reporting of payroll and superannuation information to the ATO for smaller employers, more than half are unfamiliar with the name Single Touch Payroll (STP).
“Just 43 per cent of respondents said they had heard of Single Touch Payroll, yet when asked whether they were aware all businesses paying salaries need to electronically send super and payroll through to the ATO from July 1, 68 per cent replied that they were,” MYOB said in a statement accompanying the poll results.
“This suggests that awareness of the act is in fact higher than the name Single Touch Payroll itself.”
According to MYOB, less than two-thirds (62 per cent) of the businesses surveyed already have accounting or payroll software.
Among those that do not, manual calculations were the preferred method of managing payroll, slightly ahead of Excel spreadsheets.
The small poll also found that only 56 per cent of businesses will be STP compliant from 1 July.
Commenting on the findings, David Weickhardt, GM of product at MYOB, said: “While awareness is lowest in businesses with the fewest employees, it’s most interesting to note that gap between knowledge of the name Single Touch Payroll and knowledge of the need to be compliant.”
“What that demonstrates is the need to keep things simple. The more complex the conversation becomes, the more difficult it is to adopt to change, which is why our message is straightforward: get online and let the technology do the work for you,” he said.
Business owners who may still be hesitant about transitioning to STP reporting can take a look back at the special My Business webcast on STP for answers to common business questions or download the My Business Guide to the Single Touch Payroll system.
Adam Zuchetti is the editor of My Business, and has steered the editorial direction of the publication since the beginning of 2016. Before joining My Business, he worked on fellow Momentum Media titles The Adviser and Mortgage Business.
The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Adam has written across both consumer and business titles, including for News Corp Australia and Domain.
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