31 October 2016
25 October 2016
By Steven Marsten
Have you heard of the Single Touch Payroll (STP) system initiative? If not – you soon will. It received Royal Assent recently. So it’s not if, but when. Small Business - hold on to your hats! The ATO has come up with an initiative to create “real time” payroll data and superannuation payment efficiency.
Currently many employers manually report Pay As You Go (PAYG) withholdings to the ATO. Under the new STP this information will be automatically reported to the ATO through Standard Business Reporting (SBR) software.
Employers will have the option to pay their PAYG withholding tax at the same time they pay their staff.
From 1 July 2017, all businesses will be able to commence STP reporting, with the option to make voluntary payments. In addition, the ATO will transition employers with 20 or more employees to STP. From 1 July 2018, employers with 20 or more employees will be required to use STP enabled software for reporting to the ATO. The Government has yet to fully decide on the full rollout of STP for employers of less then 20 employees. This will take place after a pilot has been completed.
Interestingly the Government is going to offer a $100 non-refundable tax offset for SBR Software upgrades. Your business will have to have a turnover of less than $2million to obtain the benefit with the offset being made available in the 2018 financial year.
It appears the Government is seriously looking at the option of real-time superannuation payments as well. It will have the benefit of boosting employee’s retirement savings.
This initiative will have some seriously good benefits such as reducing the incidence of non-compliance of payment. There is some $3 billion in superannuation payments that are currently not being paid by either businesses in severe hardship; or with cashflow problems or those simply run by rogue operators.
Small business need to start giving consideration to this as it will impact on the way some businesses currently manage cashflows. Consideration may also be given to changing payroll systems from weekly to fortnightly or even monthly! If it’s to be the latter, then six months notice maybe a good idea.
To ensure that you stay abreast of these change be sure to call the experienced team at Sothertons on 4972 1300.