As a business owner, it is important to remain aware of administrative and governmental changes that pertain to your business. Making sure that you are in compliance with all of the rules and regulations that apply to your business is essential for remaining open. Single Touch Payroll is a relatively new change to payroll reporting standards that all employers need to be aware of.
Many businesses have already made the necessary changes to comply with the requirements of the Single Touch Payroll system. However, others have not. It is important to make these changes sooner rather than later, as the ATO has imposed deadlines for making these changes. If you are still holding out, it is important to learn more and make the changes soon.
Let’s look at some of the essential things that you need to know about single touch payroll and what it means for your business.
What Is Single Touch Payroll?
Single Touch Payroll (STP) outlines a new means of reporting tax and superannuation information to the Australian Taxation Office. Under the STP framework, employers are required to report all employee payroll information, including salaries, wages, and other benefits and deductions, each pay period.
The deadline for transitioning to the STP has differed depending on the number of employees that work in your business. Small businesses had a longer time period over which to make the transition to ensure that these changes were not overly disruptive. However, at this time, all deadlines have passed and your business should be using the STP framework to report its payroll information to the ATO.
Why Was Single Touch Payroll Introduced?
Single Touch Payroll was introduced to streamline the reporting of tax information. As part of a general movement to digitise more and more government functions and data collection, this change will provide the ATO with up to date information. Having ready access to the most recent data will allow the ATO to effectively create better policies and regulations in the future.
What Are The Benefits Of Single Touch Payroll?
For businesses, STP has a number of benefits, especially for those who have never used payroll or accounting software before. These tools provide a higher degree of accuracy in payroll and accounting reporting. With fewer mistakes, business owners will be saved from the frustration of sorting through documents to solve problems manually. With the right software, business owners can also generate automatic tax rate updates and have their tax reporting information ready to go when tax time rolls around. Payroll calculations can be tricky to do by hand and having the right software tools to help you with these can save a lot of time. Any means of saving time, particularly in the context of a small business, is something business owners need to consider.
How To Make The Transition
Although the deadline for transitioning to the Single Touch Payroll has passed, there is still an opportunity for those who have not yet changed over to do so. Depending on the circumstances of your business, you can also apply to the Australian Taxation Office for more time to complete the transition.
Start by exploring the ATO’s website to find more comprehensive information about the STP and how to make the necessary reporting changes. Most contemporary payroll and accounting software in Australia provides an updated and straightforward means of complying with the STP. By upgrading your software or purchasing some for the first time, you can easily transition to comply with the Single Touch Payroll framework.