Essentially Single Touch Payroll requires every business employing 20 or more staff at 31 March 2018 to be STP compliant, requiring them to send the ATO a transaction each time employees are paid.
Good risk management suggests that business owners and financial controllers should insulate their businesses from these new compliance risks.
Firstly, ensure that your payroll staff are fully trained in the most recent best practices and obligations. Even if you only have one complex termination a year, make sure it is correct. There may be an advantage in initiating your own external audit of the payroll function from time to time. This will give you reassurance that you have the right people in the right seats.
Secondly, make sure that your software provider is STP compliant. This is not an easy task for software providers. Given that the ATO is still working out the fine details of the new STP requirements. A list of software solutions that are “STP-ready” is available on the Australian Business Software Industry Association (ASBIA) website. You may need to update your payroll software once the relevant update becomes available.
You should, however, be prepared to pay more to be compliant. Your software or payroll service provider may force you to transmit data through a specific Digital Service Provider (DSP) to the ATO. Even if they don’t, rest assured DSPs will need to jump through significant hoops with the ATO to become certified.
Finally, review your internal processes and systems so that you achieve compliance and efficiency. While the focus of STP is tax obligations, it is clear that the Fair Work Ombudsman is also vigilant in ensuring award compliance.
Alternatively, if you use a bookkeeper or other outsourced provider they may be able to ensure your obligations are met fully on your behalf. If you’re still unsure if STP will apply to you, the ATO has a handy decision-making tool here.
Read more on getting ready for Single Touch Payroll (STP) via the related articles below.
Contact us if you would like to discuss STP compliant payroll software or, if all of this looks like too much trouble, talk to us about outsourcing your payroll – an easy solution for ensuring ongoing compliance with evolving legislation.