The commencement of Single Touch Payroll since July 2018 for businesses with more than 20 employees was the starting of the new reporting era for employers to submit information such as their employees’ salaries and wages, pay as you go withholding and super information to the Australian Tax Office (ATO) supposing from their payroll solution each time they pay their employees.
Small and micro businesses with less than 20 employees will have until July 2019 to get onboard with this STP bandwagon.
According to the ATO, to date nearly 60,000 businesses have already opted in for STP of which 20,000 are considered as small business with less than 20 employees. And with the deadline looming around in few months, ATO has indicated low touch approach to STP compliance until the system settles in. How long until the STP system settles in, that is the question for many businesses that are not yet and perhaps reluctant to be on digital platform due to the nature of their business.
STP will be beneficial for younger generation employees who are tech savvy and love to be online. They will be able to view their year to date tax paid by their employer/s and super information online via myGov. With the same data collected, ATO will be able to assess whether or not employers are correctly reporting super obligations for and on behalf of their employees.
In the longer term, the ATO’s objective is to provide a consolidated and overview tax position to all tax payers from individual to business and or corporate in real time with a few clicks of the mouse.
Benefits for employers with Single Touch Payroll is that it will streamline the process of reporting to the ATO as reporting is completed along with their payroll information being submitted.
The information submitted will be prefilled on other reporting obligations ie W1 & W2 on the BAS for employers, eliminating potential errors and double handling of payroll data. Furthermore, PAYG payment summaries will not longer be required at end of the year now that employees can access their details online from myGov and auto prefilling for tax return from software or MyTax.
For businesses that are already using compliant payroll, generally nothing has changed with your normal payroll process. The additional to that payroll routine is the extra step of ATO reporting of the payrun details and it could be part of the software features or extending to their bookkeeping or tax adviser to review and submit their STP reporting obligations from their adviser’s own STP software.
Businesses not using compliant payroll software nor on the digital platform, can either upgrade their software or get an STP reporting software extension like GovReports where they can upload their payroll details in CSV or XML file formats to submit to ATO. This process can also be reviewed by their Bookkeeper or tax adviser and or lodged through their adviser’s GovReports STP reporting software account.
Businesses not using any software todate will now have option to buy new STP payroll software to comply. For micro and small businesses, ATO has reached out to software providers to make available low cost options for these businesses to get onboard.
Over 31 software providers responded and gone forward with the ATO’s proposal to participate in the STP rollout for micro and small businesses. Businesses can choose to opt in for STP solution with a temporarily low entry cost and later switch or do their initial research and stick to the solution that is best suited for them in the short as well as longer term.
GovReports STP reporting solution for micro and small business is the Interactive Accounts Manager (IAM)- with STP module or full featured IAM Business Ledger.
IAM is a simple STP application with direct lodgement capability and also integrates with GovReports so tax practitioners can also lodge and keep lodgement and auditing records from their own GovReports and or IAM account as options for better client management and electronic filings of compliance reports including all other compliance reporting forms.
IAM STP reporting module comes with options to upload payrun events in CSV or manually enter payroll details for simple payroll calculation and of course direct lodgement to ATO.
IAM STP’s annual cost is $99 inclusive of GST and lodgement and you can have your BAS or Tax agent on the account separately.
IAM Business Ledger is an easy to use business ledger built to meet micro and small business accounting and regulatory reporting needs. With options to upload data files for sales, expenses, payroll events, receipts and or invoices, bank statements ..etc to create financial and compliant reports ready for ATO lodgement. Reports available for lodgement include Activity Statement, Tax File Number Declaration, Single Touch Payroll and business tax return.
The annual cost for IAM Business Ledger is $149 GST and lodgement inclusive.
Both IAM STP and IAM Business Ledger have available option for online engagement and interaction with their own tax or BAS agent to share and review your account and reports for lodgement if advice is required.