Single Touch Payroll compliance – proactive preparation or last-minute panic?
As you may already know, the Australian Government has advised that Single Touch Payroll (STP) is mandatory for all substantial business by 1 July this year. Nevertheless, a lot of small and medium sized Australian companies still don’t have an STP plan in place.
The good news is that once you are Single Touch Payroll-enabled, reporting to the Australian Tax Office (ATO) is automated, removing much of the financial year-end reporting requirements from your to-do pile.
A similar reporting for companies with fewer than 20 employees will kick in next year, but you could also move over sooner rather than later, if you wish. Proactive preparation will ultimately save you time and money.
Here’s a checklist to help ensure compliance for the upcoming deadline.
Headcount – are you ready?
A substantial business is defined as having 20 or more employees on your payroll as of 1 April 2018. This may seem simple, but before you make any assumptions, here’s what the ATO specifies as an ‘employee’ on your payroll:
- Absent employees or those on leave
- Seasonal and casual employees
- Overseas-based employees
- Full-time and part-time employees
Exclude from headcount:
- Company directors or independent contractors
- Staff hired by a third-party labour company
- Office holders and religious practitioners
You will need to report their payment information through STP, but they aren’t included in the headcount that determines whether you are a ‘substantial business’.
Is your software provider ready?
Speak to your payroll software provider and find out how they will offer Single Touch Payroll reporting. Does your existing software need an update?
You’ll need STP-enabled payroll software that integrates with your current system, or find an all-in-one solution that will minimise disruption. Cloud-based systems are easily scalable.
If you aren’t already, then becoming and staying Single Touch Payroll compliant before the deadline can be a challenge. You don’t want last minute stress. A professional payroll service will offer support for their clients to transition. Speak to your provider to check if they have arranged a deferred start date for you.
Is your business ready for the benefits?
In addition to having your payroll function seamlessly integrated into your ATO reporting obligations – making your life easier – having more data and analytics at your fingertips can help you to form better insights into your business.
We live in a data driven world, and the more information you have to slice and dice, the better you are able to optimise your business accordingly.
