How will single touch payroll change the way you work?
The single touch payroll (STP) system is a new initiative of the Australian government and is designed to simplify and streamline the administration of employee payroll tax and superannuation obligations. Here we’ll share everything you need to know about the new single touch payroll (STP) system.
Who does it apply to?
The STP system applies to all employers with 20 employees or more. If you have fewer than 20 employees you can still report voluntarily, although it’s not a mandatory requirement.
When does STP come into force?
For a small number of businesses, the STP began on the 1 July, this year. But for most businesses, it’s not until April 2018 when employers will need to do a headcount to confirm the number of employees they have, which will determine if they will need to report through STP system.
From 1 July 2018, the STP system will become compulsory for all Australian businesses employing 20 or more staff.
According to the ATO website, “From that time, all Australian businesses will be required to have a digital payroll solution that will allow reporting of all salary information, including wages, deductions and super information, to the tax office all at the same time.”
What are the proposed benefits of the STP system?
The STP system will eliminate red tape with many proposed benefits to both employees and employers.
Besides greater efficiency, through better digital payroll processes, other benefits of STP include:
- This is a great opportunity for small businesses to review their current payroll systems and software, and make any changes that will simplify the process and help them save time on admin.
- Eliminating the need of employers to report employee-related Pay-As-You-Go withholding in activity statements throughout the year
- Removing the requirement for employers to produce payment summaries to individuals, or a payment summary annual report to the ATO commissioner
- Giving employees the ability to view their total year to date salary and wage income, PAYG withholding amounts and super guarantee contribution amounts as they accumulate
- Providing both employers and employees with more assurances that obligations are being met
- Assisting the ATO to monitor PAYG withholding and super obligations with real-time visibility of an organisation’s payroll system
- Reducing the risk of businesses getting behind on employee superannuation entitlements payments
How will STP integrate with your payroll software?
One of the key considerations of STP is looking into how it will integrate with your existing payroll software.
The good news is that many accounting payroll systems will set STP up for you. The even better news is, if you use Deputy, your transition should be smooth and trouble free, as we already integrate with over 35 partners, including the most popular accounting systems:
- Sage Meridian
- Quick Books
Are you looking for help to set up digital processes? Find out how Deputy can make your life easier so you can get you back to loving your business again.