Australian businesses! Do you have employees? Do you work for yourself as a sole trader? Are you using the right payroll software to comply with ATO requirements?
Beginning on 1 July 2019 all Australian businesses need to provide their PAYG and superannuation directly to the Australian Taxation Office (ATO) with each payroll through specific accounting software known as Single Touch Payroll (STP). Whether you’re on your own or hire employees, STP will impact you.
Employees can see these payments when they are updated through their government portals. This means that employers won’t need to give their employees a payment summary for the information that is reported through STP or provide separate information to various government agencies. It is all done at one time in one location.
New STP Changes
From 1 July 2021, small businesses with closely held employees and micro employers completing quarterly STP reporting will need to report using STP.
A registered tax agent for a micro business can lodge an STP report once per quarter in your behalf. The due date for the STP lodgement will be the same as the due date of the businesses BAS. If the STP report is lodged quarterly, it is due the same day as the BAS. STP can be reported monthly on or before the 21st of each month.
1 January 2022 will see the introduction of Phase 2. Single Touch Payroll Phase 2 is a bigger move towards more complete digital records and reporting. Changes required for Phase 2 include:
- Providing a reason for employee termination which will remove the need for an employment separation certificate
- Child support garnishee deduction amount via pay events thus removing the need to report separately on a monthly basis
- Income stream collection which will include income type, payment type and may also include a country code for specific income types
- Tax file number declaration
- Tax treatment codes which will include a 6 character code to indicate what PAYG tax scales and other components were applied to your employee withholding amount
- Inclusion of lump sum E letters
- Paid leave reporting
- Negative YTD reporting
- Additional allowance type codes
Getting your head around your payroll requirements is hard enough when you have a small business to run. It take time, energy and expertise to make sure you’re doing everything you need to do. You need to pay your employees the right wage, take the right amount of withholding tax from their wages and pay their super guarantee accurately.
You’re also responsible for making sure your employees have their pay and super information and make other deductions, such as child support, healthcare insurance or donations, into the right accounts.
The more employees your business has, the more complex your payroll duties will be. You’ll have a mix of hourly rates, wages, salaries, not to mention contractors, commissions, overtime, expense claims, allowances and leave entitlement to name a few. Your payroll might be different each time you run it.
It’s important to stay organised, but help is at hand if your payroll is becoming unmanageable. ITP’s bookkeeping service can assist with your payroll, accounts, BAS and GST obligations, expense tracking, cash flow management in a cloud based environment. Our bookkeepers are fully trained tax professionals that have the support of qualified senior accountants from one of the largest companies in Australia.
ITP can help set you up for STP and make sure you’re correctly reporting to the ATO. Our tax and BAS agents can also assist with your STP and payroll obligations and keep you on time and compliant. Whether you need us for one day a week or the whole week, ITP will tailor our service to suit your needs. From reconciling bank statements to making sure your BAS is filed on time, we will keep the backbone of your business running accurately and on time.