Fewer than 10 per cent of businesses are ready for the implications of Single Touch Payroll, which an accounting body has warned will add a significant compliance burden for SMEs.
A straw poll conducted by My Business’ sister publication Accountants Daily revealed that less than 10 per cent of accountants believe their clients are ready for the shift to Single Touch Payroll (STP). Out of 290 voters, 261 (90.6 per cent) said they were not prepared.
Last month, the government confirmed the introduction of STP for businesses with less than 20 employees from 1 July 2019, as part of its broader intention to penalise non-compliance with Superannuation Guarantee obligations and its push towards digitisation.
Employers with more than 20 employees will transition to STP from 1 July 2018.
The Institute of Public Accountants (IPA) believes the move will disadvantage SMEs in particular, given they lack the financial capacity to cope with the compliance costs, despite the transparency benefits that come with it.
“While initially STP delivers little benefit to small business, we acknowledge that other benefits exist such as transparency over superannuation guarantee payments,” IPA chief executive Andrew Conway said.
“Employees will be able to log on and make sure they are being paid the correct amount for their superannuation contributions so this level of transparency is most welcome.
“Our concern is for the 70,000 small businesses that have been identified that will struggle to implement STP without help and support. Many of these businesses are not digitised and will require adoption of technology and education.”
Mr Conway believes micro business with less than five employees will require significant support and incentives to implement STP, and supports the idea of a phased and targeted incentive approach proposed by the government.
“We are pleased to note that the government is considering a partial offset of costs and other incentives,” he said.
“However, we would like much more detail to ensure small businesses are not adversely impacted by the implementation of STP.
“There is also a reliance on strong internet connections which would disadvantage many working in more remote areas of Australia.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals. With a focus on breaking news and exclusive analysis, Jotham keeps Accountants Daily readers up to date with company moves, tax updates and essential business and client strategy.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including The Sydney Morning Herald and Channel NewsAsia.