Single Touch Payroll (STP)
Most of the business people by this time heard about STP/Single Touch Payroll. As a Tax Agent, we deal with most of the clients who’s employees less than 20. This magic number 20 is very important for STP as from 1st July 2018 if any business employee number 20 or more STP reporting was mandatory. If employee less than 19 STP reporting starting from July 2019.
In plain words, single touch payroll is a new reporting system in where through STP enabled software employer will able to report each week how much they are paying to their employees, withholding tax and super each week. The good side of the reporting is that end of the financial year not requires separate payment summaries to be issued to the employees.
This STP government introduced through ATO for a few reasons such as:
- Efficient wages, tax and super on time reporting.
- This will stop or at least reduce the cash economy
- It will ensure super and tax is paid to the ATO by the businesses on time.
Now 45,000 businesses are STP reporting to the ATO each week. There will be almost 730,000 business are going STP reporting to the ATO from 1st July 2019.
There are a lot of small businesses are not still ready for STP. Personally, I have advised many of our clients to be ready for this and few of our over 20 employees started STP reporting since July 2018. Unfortunately, many micro businesses are not still ready, or they are not well equipped to deal with this. Most of the micro businesses rely on their tax agents who report quarterly their wages through the BAS’s. Some of these business people come from overseas and English is not great or not technologically advanced. But no doubt they are good at what they are doing. Problem is that STP has to be through to the software which operation might not easy for many business owners. If they hire for a bookkeeper to do this or use their Accountant that could be costly for them.
ATO is tirelessly working with many software companies to reduce software cost so that suits micro employees. At the moment ATO recommended few STP enabled software are:
- AccXite Pty Ltd
- Australian Payroll Professionals Holdings Pty Ltd
- Bass Off Pty Ltd
- Cristabel Pty Ltd
- Easy Payslip Pty Ltd
- Employment Hero Pty Ltd
- E-Payday Pty Ltd
- Etax Accountants Pty Ltd
- Free Accounting Pty Ltd
- Globe BD
- Govt Reports
- Intuit Australia Pty Ltd
- Lodgeit Pty Ltd
- Ironbark Software
- My accountant Technology Pty Ltd
- MYOB Australia Pty Ltd
- OB Secure Messaging
- Our map of
- Price Waterhouse Cooper
- Reckon Australia Pty Ltd
- Single Touch Pty Ltd
- SRI Enterprise Software Pty Ltd
- Total Forms (Catsoft)
- Xero Australia Pty Ltd
Recent studies by Xero indicated that one in five businesses are still relying on very old methods such as a spreadsheet or paper-based system. But time is running out as Single Touch Payroll deadline is very nearer. ATO promised to reduce the software cost and expecting they could influence software companies to charge monthly in between $5-$10 for micro companies to process, maintain and report to the ATO through to the software.
I personally support STP and in my opinion, big change in the business reporting since GST introduction in Australia and this could lead to fairer Australia what ATO’s aim. In reality, there could be some hiccups initially but eventually, it will better for businesses, ATO, government, software companies and Accountants.