Is your business ready for the STP switchover?
Single Touch Payroll will be mandatory for small businesses as of 30 September 2019
If you're a small business owner with 19 employees or less, it will be mandatory to pay your employees using Single Touch Payroll (STP) as of Monday 30 September 2019. While larger businesses are already required to use STP to pay their employees, it will only be mandatory for small businesses starting next week.
What is STP?
STP is a new way of reporting tax and superannuation information to the ATO. With STP, small businesses will report employees' payroll information – such as salaries and wages, pay as you go (PAYG) withholding and superannuation liability – to the ATO each time they pay their employees through STP-enabled software.
It's essentially a way for the ATO to ensure that employees are being paid their correct entitlements. It can also make organising payroll more straightforward for small business owners, as they will no longer need to provide the ATO with a payroll summary annual report at the end of each financial year.
How do I start using STP?
There are a number of options for businesses looking to start reporting using STP:
- Report to the ATO through your existing payroll or accounting solution. If your business currently uses STP-enabled accounting software, simply speak to your provider to find out the next steps. If you are unsure if your business is currently using STP-enabled software, you should also contact your provider to find out.
- Change to STP-enabled payroll software. If your current provider doesn't use STP-enabled software or you do not currently use payroll software, there are a number of providers that offer business-minded software products to help make the transition as easy as possible.
- Employ a third party to report on your behalf. Employers can also hire a registered tax or BAS agent payroll service provider to report through STP-enabled software on the company's behalf.
How much does switching to STP cost?
The cost of switching to STP-enabled payroll software will vary depending on the provider. However, it is considered to be an affordable business solution.
Small businesses with only one to four employees qualify for no-cost or low-cost solutions, which are either completely free to use or less than $10 per month.
If you're worried about making the switch to STP or your business isn't quite ready yet, you can also request an extension directly from the ATO via their website.