As a business owner, you have probably heard the term “Single Touch Payroll” floating around in the last year or so. Whether you are the leader of a small enterprise or a large company, Single Touch Payroll is something that all businesses will have to transition into by the end of September 2019. If you find yourself scratching your head and feeling a little confused by it all, fret not. In today’s article, we have a look at what Single Touch Payroll is, how it works and how you can implement it into your business before the end of the month deadline. Read on to find out more!
A Brief Summary Of Single Touch Payroll
Single Touch Payroll has been introduced by the Australian Taxation Office to streamline payroll reporting processes for businesses all around the nation. With the aid of single touch payroll software, employers no longer need to send in annual payroll reports to the ATO as with this new scheme, reports are sent in automatically on a payment to payment basis.
Single Touch Payroll was made mandatory for businesses with more than 20 employers in July of 2018, and the current deadline for small businesses with under 20 employees is 30 September 2019. With this deadline fast approaching, it is advised that small business owners make the switch as soon as possible in order to prevent getting into any trouble with the ATO.
Single Touch Payroll has also eliminated the need for employee payment summaries as the ATO will now be using single touch payroll as the sole record of salaries paid, taxes paid and superannuation contribution. This means that employees can gain access to all this information by simply logging into their myGov accounts online. This gives employees the flexibility to access these details regardless of where they are, whether that is at home, on vacation or on the road.
How Does It Work?
Single Touch Payroll is a very easy process that has streamlined payroll reporting for the better. Business owners are required to use STP software that generates automated reports in a standard business reporting compliant format. Do keep in mind that it is important that the specific format of reporting is never deviated from, as doing so may end up in your payroll reports being rejected by the Australian Taxation Office. Depending on what payroll software you are currently making use of, you may or may not have to upgrade your system to keep compliant with STP standards – something we will touch on in the next point. Do keep in mind that Single Touch Payroll software will provide the ATO with pay-by-pay reports and business owners only need to notify the ATO when the last pay run for the year has been made.
What Do I Need To Do?
If you’re a small business owner who is looking to switch over to Single Touch Payroll immediately (as you should), the first step to take is to ensure that your online payroll software is up to date. This means ensuring that your online software can generate STP compliant reports for you in the exact format needed.
If you are currently utilising desktop software, you will need to find a service that allows you to upload your reports, convert them to a compilable format and submit them online on your behalf. Companies currently using paper or spreadsheet reporting formats will need to find a service that can convert your data into a compliant digital format that can be sent off to the ATO.
We hope that this article has shed some light on exactly what Single Touch Payroll is, how it works and how you as a small business owner can implement it to your business before the 30 September 2019 deadline. Best of luck!
