The Single Touch Payroll go-live window for Australia’s small businesses with under 20 employees has begun. While a busy first half of the 2019 calendar year may have led some to postpone action on STP, there is little time remaining until 30 September 2019, which means it’s time to get moving.
Fortunately, the ATO has been busy releasing information to assist businesses to make the transition to STP with minimal fuss. With guidance on everything from compliant software, to what leniency the ATO may be willing to grant, small businesses are now armed with the information they need.
Here’s the top five developments from the ATO ahead of the new STP era.
It’s official. STP is a go!
Let’s start with the news you should have heard by now. Single Touch Payroll reporting was legislated for businesses under 20 employees by the Federal Government in Canberra in February this year.
Since that date, 700,000 smaller businesses across Australia have been certain of the fact that, starting from 1 July 2019, the STP reporting regime would become a reality for them. In short, STP is a go.
There’s still time, but not much
Since then, many of the STP implementation details have become clearer for small businesses. ATO Commissioner Chris Jordan released a statement in February, for example, that acknowledged some smaller businesses might find the transition to STP quite a big change in such a short time.
As a result, the ATO advised small employers they will be able to commence reporting any time from the 1 July start date to 30 September 2019. This gives them a further three-month window to adapt. Any employer that requests additional time to begin STP reporting will also be granted a deferral by the ATO.
Micro-employers given an extra hand
Mirco-employers (or those with just 1 to 4 employees) will be given extra help from the ATO during the transition to STP reporting in line with a promise to adopt a ‘supportive, tailored approach’.
Just one of the measures on offer to this segment is allowing those who use a registered tax or BAS agent to report quarterly for the first two years, instead of every single time a payroll is run.
Employers can breathe easy…for now
The risk when any new law is introduced is you might be caught out not complying with it – even if that wasn’t your intention. We have some good news – this won’t happen to you for some time yet.
The ATO has promised not to issue any penalties for mistakes, or missed or late reports for the first year. In addition, exemptions from STP will be provided for employers who may be experiencing hardship, or for those who are doing business from locations with intermittent or no internet connection.
While the ATO is going easy on smaller employers, there’s no reason why they need to wait any longer. Because it’s so simple to start reporting using low-cost compliant payroll software like ePayroll, the smartest way forward is to commence STP as soon as you can and get on with your business.
Some additional deferrals and details
The ATO has provided additional guidance for those businesses who have a Withholding Payer Number (WPN), rather than an Australian Business Number (ABN). While everyone else will be reporting, these businesses will be exempt under STP for the 2018/19 and 2019/20 financial years.
One other key implication of STP reporting is that different government agencies will be able to share more timely information more effectively. The ATO has advised that information lodged by employers through STP will begin being shared with social security agencies from 1 July 2020.
The final countdown
In May 2019, there were over 100,000 employers in total reporting through the STP system in Australia. That number is about to get a lot larger. With 700,000 small businesses set to join the system before 30 September, STP is about to become the norm for payroll reporting.
The final countdown may be on, but small businesses don’t need to worry. The ATO has prepared a list of no-cost and low-cost payroll software solutions that can make transitioning to the new regime very simple, including ePayroll, which has been designed especially for the small employer market.
Contact us if you would like to discuss STP compliant payroll software.