Single Touch Payroll (STP) - debunking the myths - let's get the truth
Don't be scared - be informed
Single Touch Payroll - debunking the myths and getting the real deal !
Recently I sat in on an amazing presentation on all things STP - so let’s get down to the nitty gritty -
what is it and how will it affect your business?
Under Single Touch Payroll - (hereafter referred to as STP)the ATO will get :
Real time data over payroll and st reamlined reporting this will in turn lead to.....
A level playing field preventing end of year surprises and most importantly will seek to protect Superannuation Guarantee entitlements of employees.
Over 111000 employers are currently reporting with this figure increasing daily.
Over 7 million employees can now see their payroll information in their My Gov accounts !
Employees can also take advantage of the Employee Commencement services - this pre fills a Tax File Number Declaration and Super Choice Form - that employees can then send to new employers. More information here :
So what trends are the ATO already seeing in the data ?
Incorrect employee information eg incorrect TFN
STP data not being submitted after pay day
Anomalies with Software ID’s (more on this later)
End of Financial Year set to change
The biggest change by far is NO more Group Certificates/Payment Summaries - instead the ATO will generate this information in a new form called an ‘ Income statement ” . Don’t worry KRS Consulting Group will still be balancing the liabilities and payroll, advising your numbers for Workcover Declarations and providing you with information to send to your employees - our role just changes at the final stage.
Rest assured we will guide you as usual through the entire process.
The new process is called Finalisation
The due date this year is 31/07/19 - no not 14/07/19to provide to the employees or 14/08/19 to provide to the ATO - just in the middle .
( Oh unless you have any businesses of over 20 employees who had to report in STP from 1 July 2018 - their due date for finalisation is still 14 July!)
Don’t get comfortable - this is for one year only ! Again - we as always will manage this deadline.
Once we finalise - the employee can view their information in their My Gov account with a status of “ Tax Ready
”. So it is REALLY REALLY important we balance before we finalise - leave it to us - we have got your back.
The ATO will then make the information also available to Tax Agents for pre fill into Tax Returns SO if your employees do not have a My Gov account and they use a Tax Agent - they are still covered - just no more emailing pieces of paper.
Yes I know employees do not believe that it is done unless they receive the magical piece of paper - but these are digital times - and we are All moving with them - that’s why KRS Consulting Group will send you communications to send to your employees to eliminate confusion and provide certainty around the process.
So what do you need to do ?
All of my current clients use STP ready software - over 50% of these clients have opted into STP already - well done - do nothing !
Just file your pay runs and we will take care of the rest as we usually do.
If you have not yet opted in and are using compliant software eg Xero, Quickbooks online - action our instructions and Opt in NOW to be STP ready.
If you are not a client of KRS and do not have STP ready software - here are your options :
Select a low/no cost reporting solution for $10 or less per month - we use and recommend Xero Payroll only at $10 per month - we can set it all up for you !
Take advantage of Deferrals and exemptions - (if they apply to you) -BUT unless you are really stuck for internet coverage - why delay the inevitable - find a solution now - however if you need it - these deferrals exist - contact your Tax Agent to discuss
Quarterly reporting when you complete your BAS - only if 1 to 4 employees - NOTE this can only be accessed through a Tax or BAS Agent - you cannot take this option as a business owner without using an Agent - basically we will lodge the STP information at the time of doing the BAS - this will be a separate lodgement and incur a separate cost.
Additionally this is only available until 30/06/21 - so the overall compliance obligation does not magically disappear - just delayed.
Also - we need to use a STP enabled software anyway to do this - so again - why delay ??
Penalties and Fines - there will of course be an amnesty period - but make no mistake - this is Tax Law and the ATO will begin to police the lodgements and issue failure to lodge notices and fines.
Closely held payees - these are the ‘Mum and Dad’ type wages - special situations will apply - we will advise as we get closer to implementation date - watch this space !
STP is coming - in the short term creating a ‘change headache’ will minimise our paperwork and digitise your data
So grab a seat - buckle up and let’s do this !
For more information or to get an STP enabled software solution - contact us at KRS Consulting Group
Ph (03) 5243 0453
