Biggest change since the GST
WELL the shoe-box is well and truly gone and now comes another big change in the way business reports their payroll and superannuation information to the Australian Taxation Office.
All Australian businesses with employees will move to a mandatory digital payroll reporting system on July 1 called Single Touch Payroll (STP) and there are warnings many businesses are not prepared for what is being called one of the biggest changes to business operations since the GST was introduced.
From July 1, all Australian employers will be required to report employees pay and super electronically via a single-touch payroll system.
STP applies even if you only have one employee or just employ yourself in a company.
The trap is many employers are unaware this change applies to them, it applies to everyone with employees.
If you are already using a payroll system in Quickbooks, MYOB or another computerised program, the change is quite minimal and you or your accountant can quickly set it up.
Ultimately STP is setup, it is just one button to press, so is not a huge change for these employers.
It will be smaller employers who don't use a computerised payroll system that need to do more and there are some options available for these employers that allows them to comply.
The tax office has a list on its website of no and low-cost processing apps you can use.
The tax office does understand that many small businesses do not currently use commercial payroll software and they will not be required to purchase such software to report under STP.
Another big change is that employees they will be able to access their PAYG Summaries through their MyGov account or through Australian Taxation Office online services, it will no longer be required to be provided by your employer, so it is a good idea that employers communicate this to their staff so they are aware of this change.
Also employers need to make sure their superannuation payments are made to staff on time, because for the first time the ATO and employees will be able to see quarterly updates on how much and when superannuation has been paid. Basically the ATO can check on this and catch you out, technically if super is paid late it is no longer tax deductible!
At first it may seem like more work and a big change, but ultimately it is a good thing for your business to be on top of this.