Senate passes $20000 instant asset write off the extension
THE GREATEST CHANGE AFFECTING PAYROLL FOR YOUR EMPLOYEES IS HERE. SINGLE TOUCH PAYROLL! DUE DATE 1ST JULY 2018!
As an employer or a small business owner; managing employee obligations and even generally managing staff is one of the most crucial and important aspects of running a business. Payroll forms the biggest expense for most small businesses. In such a situation most small business owners experience payroll management issues and try to find out solutions that suit them. If you have been using a payroll software or calculating manual payroll and keeping manual records, life is just going to get a bit more harder for you. With the introduction of the STP (Single Touch Payroll) there is another dimension of reporting to the ATO that is being rolled out. This is a compliance measure that affects businesses with more than 20 employees from the 1st of July 2018 onwards and for businesses with less than 20 employees from the 1st of July 2019 onwards.
Single Touch Payroll (STP) which aligns reporting obligations to the payroll processes will be implemented starting the 1 July 2018. The question for employers is, how ready are you for STP? To give us a brief overview, let’s go over a few quick facts about STP.
With STP, employers are required to report to ATO every time they pay their employees whether that is weekly, fortnightly or monthly. However, this reporting would not affect or change your pay cycle e.g. change your pay cycle from weekly to fortnightly, etc.
The required information to be sent to the ATO would include your employees’ salaries and wages, allowances, deductions and other payments, pay as you go (PAYG) withholding and superannuation information.
Start dates
As an employer or a small business owner; managing employee obligations and even generally managing staff is one of the most crucial and important aspects of running a business. Payroll forms the biggest expense for most small businesses. In such a situation most small business owners experience payroll management issues and try to find out solutions that suit them. If you have been using a payroll software or calculating manual payroll and keeping manual records, life is just going to get a bit more harder for you. With the introduction of the STP (Single Touch Payroll) there is another dimension of reporting to the ATO that is being rolled out. This is a compliance measure that affects businesses with more than 20 employees from the 1st of July 2018 onwards and for businesses with less than 20 employees from the 1st of July 2019 onwards.
Single Touch Payroll (STP) which aligns reporting obligations to the payroll processes will be implemented starting the 1 July 2018. The question for employers is, how ready are you for STP? To give us a brief overview, let’s go over a few quick facts about STP.
With STP, employers are required to report to ATO every time they pay their employees whether that is weekly, fortnightly or monthly. However, this reporting would not affect or change your pay cycle e.g. change your pay cycle from weekly to fortnightly, etc.
The required information to be sent to the ATO would include your employees’ salaries and wages, allowances, deductions and other payments, pay as you go (PAYG) withholding and superannuation information.
Start dates
If you have 20 or more employees, then you are required to report from 1 July 2018. However, if your payroll software is not ready then you can begin on the deferred start date which you can know through your payroll software providers. However, if your software is ready but you are not ready, you could also apply for your own deferred start date.
For employers with less than 20 employees, reporting can be made starting 1 July 2019. But, if you and your software are ready, then you can choose to report through STP before the required date.
Key terms
Basic key terms for reporting through STP is pay event and update event. Pay event refers to the sending of the tax and superannuation information on or before each payday through the STP-enabled software. While the update event is making corrections to the information sent to ATO, if there is any. Although, you could also choose to make the corrections through the next regular pay event.
Furthermore, under STP, mandatory and voluntary withholding payments can be reported. Examples of mandatory payments include payments: to an employee, such as salary or wages; of remuneration to the director of a company and unused leave payment. Voluntary payments would include a payment that is covered by a voluntary agreement, under a labour hire arrangement or a payment specified by regulations and for termination of employment. However, there are payments which cannot be reported under STP which would include a superannuation income stream or an annuity; a superannuation lump sum; a compensation, sickness or accident payment and dividend, interest and royalty payments.
Ways of reporting
Reporting through STP can be done in three ways: 1) Report from your current payroll solution when it is STP-ready 2) Report from a new payroll solution which is STP-ready 3) Ask a third party to report through STP on your behalf.
With all the above, STP has the benefit of not needing to provide payment summaries to your employees. This is because your employees would be able to view their payment information via the ATO online services through their myGov account. However, it should still be noted that to be exempt from giving payment summaries, a finalization declaration should be made.
For those who are reporting under STP for the first 12 months, which is generally the case for 2018, ATO has announced that employers will be exempt from an administrative penalty for failing to report on time unless, ATO has given a written notice advising otherwise.
If you are unsure or you have questions then please let us know by giving us a call today on 03 8609 1889 or email us on info@a1accountants.com.au and one of our friendly staff will be able to assist you with your queries.
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