The 30 September deadline for small employers to begin using Single Touch Payroll is now just a week away, with the ATO revealing that more than 3 per cent of these businesses have already been granted a deferral or exemption.
The Single Touch Payroll (STP) system for employers to report payroll data to the ATO came into effect for employers with fewer than 20 staff as of 1 July this year, but a three-month leeway period was granted to assist smaller businesses make the transition to the digital standard.
From Tuesday, 1 October 2019, employers of all size will be required to use the STP system, although penalties for smaller employers will be waived until 30 June 2020.
STP was already rolled out to employers with 20 or more employees from 1 July 2018, with penalties taking effect from the current financial year.
Deadline looms large for many businesses
According to the ATO, there are more than 425,000 employers across Australia now reporting via STP, including around 350,000 smaller businesses.
But that means there are thousands more employers in Australia who are yet to do so, meaning a last-minute rush is likely ahead of the coming deadline.
“We understand all employers operate in slightly different ways and can sometimes be faced with unique challenges which can affect their payroll processes,” said assistant commissioner Jason Lucchese.
“Regardless of whether you’re ready to start reporting, or if you still need more time to get ready, there are options available to you.”
Those options, the ATO noted, include starting to report now or apply for a deferral, while some businesses are eligible to work with their tax agent to report on a quarterly basis.
Thousands apply for STP deferral
The ATO told My Business that tens of thousands of small businesses have applied for a deferred start date to their STP reporting, most of which have been granted.
“As at 18 September, the ATO has received 37,748 applications for deferrals, exemptions and quarterly reporting concessions. Of these, 33,107 have been approved, with a number of applications still being assessed,” a spokesperson said.
“Our data shows that 3.2 per cent of small employers are covered by a deferral or exemption, or have been granted a quarterly reporting concession.
“The ATO is encouraging small employers to engage with us ahead of the 30 September deadline if they’re not ready to start reporting.”
Matthew Addison, executive director of the Institute of Certified Bookkeepers, said in a joint statement with the ATO that the transition to STP can be made relatively painlessly.
“We are finding that with a little bit of preparation and knowledge, bookkeepers and employers can implement and manage STP with minimal interruption and smoothly integrate it into their everyday business process,” he said.
“Businesses have long been using systems to pay their employees; now that system reports the same information to the ATO.”
Meanwhile, the ATO’s Mr Lucchese reinforced that there is a 12-month stay on any penalties for reporting mistakes or missed provisions.
“The Commissioner of Taxation, Chris Jordan, has reassured small employers that the ATO’s approach will be flexible, reasonable and pragmatic, with no penalties for mistakes, missed or late reports for the first year,” he said.
More information on the process, special exemptions and low-cost options for micro businesses can be found in the My Business Guide to Singe Touch Payroll reporting.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
Ask the Experts: Business assets and liability after separation
By Anneka Frayne
Anxiety in the workplace
By Staff Reporter
Managing ‘sleeper issue’ of directors’ GST risks
By Jim Koutsokostas