Single Touch is Here and yes it is MANDATORY! Last year SuperStream was at the forefront of employer’s minds with the ATO making it mandatory to process all superannuation payments through a compliant service provider.
July 2018 is the first milestone for the introduction of the ATO’s next initiative in this space – Single Touch Payroll. Over the next 18 months all companies will be submitting payroll to the ATO at the time of the payrun.
Collaboration between government and software companies is revolutionising the financial world, increasing accuracy and decreasing processing and paperwork. It also allows for more immediate and accurate reporting to the ATO in turn ensuring that all employers are reporting PAYG and superannuation correctly and paying this on time.
Businesses with an employee head count of 20 or more, assessed April 2018, will be required to adopt Single Touch Payroll (STP) from 1 July 2018. This will set a new standard of reporting in Australia, providing the ATO with access to real time numbers that will, in time, reduce the number of forms that need to be completed and lodged monthly, quarterly, and yearly.
The move will require business to have complete transparency with the ATO who will also share real time employee data with other government agencies, such as Centrelink, instead of waiting until the end of the year.
Automation of compliance will force business to ensure that cashflow is sufficient to pay PAYG and superannuation on time. For the first time the ATO is going to be able to match an employee’s payment to a superannuation fund to a real time payslip.
What does this mean for your business?
STP is mandatory which means that your business will need to comply.
Given that the business is utilising one of the more ‘modern’ software packages the change will be minimal as the software will look after the reporting. As the payroll is processed it will automatically send the payroll data to the ATO. If an error occurs i.e. overtime was forgotten, there are options to re-submit a change or if it can wait, you can process the change in the next payroll.
For those not utilising outside assistance or who are still on desktop software, the choices will be:
- Utilise a specialist firm to process your payroll
OR - Adopt and modernise outdated accounting software
Businesses with under 20 employees will have a probationary period and a choice to change early or to wait until 1st July 2019 when it will be mandatory nationally.
Inspired suggests that businesses prepare now so there is not a last minute requirement – at the very least work on an action plan. Think strategically now about your software and work towards the change to a cloud environment. In the cloud the software updates automatically on a regular basis and keeps up with industry change. It will also allow your business to automate many manual processes that require time and money and eat into your profits. Your competitor is already there!
Click here for more info from the ATO or contact us for a free discussion about your options.
