For all businesses with 20 or more employees, STP will come into force from 1 July 2018. The system requires employers to report employee tax and super information through ATO-compliant payroll software.
Small businesses with fewer than 20 employees have another year to prepare for the transition, which will take effect for them from 1 July 2019.
The ATO is advising businesses to liaise with their existing software provider about when STP will be available, given that some providers have asked for more time.
“Single Touch Payroll is a game-changer for both employers and the ATO. This will allow employers to be able to meet their reporting obligations to us using their own payroll or accounting software,” said John Shepherd, assistant commissioner of the ATO.
“Many employers will be able to update their existing payroll software to a version that is Single Touch Payroll ready. Employers with 20 or more employees who do not use payroll software will need to choose a product that offers STP by 1 July 2018.”
Mr Shepherd added: “Employers need to start preparing now in order to be ready for this important reporting change.”
However, not everyone is convinced that STP will benefit employers, with at least one bookkeeper claiming that many of those already using it – larger businesses – have struggled.
In October last year, a poll on My Business’ sister publication Accountants Daily found that SMEs were woefully unprepared to make the transition.
Andrew Conway, chief executive of the Institute of Public Accountants (IPA), has previously said that the benefits of STP will only become apparent over the longer term.
“While initially STP delivers little benefit to small business, we acknowledge that other benefits exist such as transparency over superannuation guarantee payments,” he said.