STP reporting? No worries!
With the change to payroll legislation “Single Touch Payroll” coming up fast, for anyone that employs one more staff, I thought that some information on the topic would not go astray at this time.
We have been running two hourly seminars on this topic for some months now and will continue to run these monthly until the need subsides for business owners. During delivery of these seminars I am continually surprised at some of the misconceptions that people have about this payroll reporting change.
Hearing those misconceptions and understanding those fears has put me in a good place to settle any worries you might have about changing your business over to Single Touch Payroll (STP).
What is STP?
From the 1st of July 2019, any business with one or more staff will be asked to report additional details to the ATO on or before each pay run date. The deadline has been extended to 30th September 2019, so if you start the process and begin to lodge before 30th September you will have met your requirements.
What is reported?
- Details of gross payments, tax withheld and superannuation accrued on each pay will be communicated to the ATO.
- Employee details will also be sent.
- Year to date information is sent across so you DO NOT have to start reporting at the beginning of the year.
- Think of what is reported to the ATO when you send payment summaries at the end of the year; now think of this as being sent each time you run the pays! Plus your will report your employees year to date superannuation figures as well.
It's not as bad as it sounds!
- Your software will do the reporting for you, simply run your pays as you would normally and then click one additional button to send the details through to the ATO, all you need is an internet connection.
- You will need to link your accounting software to the ATO. Just follow the prompts within the software to get access to your datafile’s unique software ID, then call the ATO to make the connection. NO AUSKEY REQUIRED.
- You will NOT CHANGE the way that you report or pay the ATO currently. Your super and BAS lodgements and payments will stay the same. It is just an extra button to click after your pay run.
- If your software version is up to date then you should have STP reporting available already, check with your software provider if you are not sure.
- If you are MYOB AccountRight, latest version, and you are working on the desktop (not In the cloud) that’s fine. Just make sure that the computer that you run the pays on has an internet connection.
What changes will you need to make?
- You staff are those that will be most affected. As of June 2020 end of year payroll figures will be communicated to staff via their my.Gov account. As of June 2020 employees will NO LONGER be provided with a payment summary pdf or printout.
- Please work with your employees to understand that its best if they have a my.Gov account setup in readiness for this change, link here for fact sheets that you can provide your employees.
- If you are recording payroll in a paper wage book or in excel then your business will need to look at ways to report STP on or before each pay run date. The ATO has a list of LOW COST solutions that you can use to report, link here.
- If you are recording payroll in a paper wage book or in Excel we suggest that you start using MYOB, Xero or QuickBooks online, all of these popular accounting packages are offering $10 per month options for payroll if you have less than four staff. This is a technology step forward for your business and your accountant and others will be able to support you with these packages.
- Why not take advantage of the imposed change for the better of your business, once you have STP reporting setup look at systemising other tasks such as sales invoices and payment reminders.
- If your business is still using MYOB Classic v19 or older (green icon on the desktop) then you will need to upgrade to MYOB AccountRight Live v2018.2 or higher (purple icon on the desktop or in the cloud)
There are concessions available for some groups, if the above all sounds too hard for you then one of these time-based concessions may apply to you:
- Start by 30th Sept 2019 – Date has been extended from July to September.
- Report STP quarterly in house or use a BAS Agent to report quarterly, for the first two years, if you have between one to four employees
- No penalties for mistakes or missed lodgements for first year
- Deferrals granted to any small employer who requests additional time, form here
- Exemptions provided for employers experiencing hardship
- Exemptions provided for employers in areas with intermittent or no internet connection
- A one year exemption for payees with closely held payees, to 1 July 2020.
- Make sure that your software is up to date
- Follow the prompts to link with the ATO, NO AUSKEY REQUIRED
- Run your pay run and then click one more button to file the additional information.
- Start talking to your employees about the change and about their myGov access
I really hope this information and my insights have helped to alleviate any worries you may have had regarding commencing STP reporting.
Until next month,