Single Touch Payroll – Accounting Advice l Canny Group
With the dawn of the current financial year, regulatory compliance for employers has become even more stringent with the introduction of Single Touch Payroll (STP). STP is a reporting framework for businesses with 20 or more employees to provide payroll and superannuation information to the Australian Taxation Office (ATO) on or before the day on which these amounts are paid. This is as opposed to providing this information partly through a monthly or quarterly business activity statement. We’ve put together what you need to know now with the introduction of Single Touch Payroll to help you through the process, introducing, Single Touch Payroll – Accounting Advice l Canny Group.
The framework was introduced in an effort to reduce the costs to employers of meeting their PAYG withholding obligations. STP will reduce the need to complete activities such as reconciling data between regular payroll payments and data used to complete an activity statement or reconciling and producing an annual payment summary for an employee at year end. Conversely, employees will be able to access their information in real-time via online MyGov accounts and know when payments have been made and how they have been calculated. All in all, this seems like a win-win for both employers and employees alike. However, with real-time data comes real-time errors and penalties.
Previously, if employers calculated incorrect PAYG withholding amounts or didn’t pay their employees’ superannuation on-time, there was time to fix up the errors or make any late payments with little or no ramifications. However, with the introduction of STP, the ATO will know in real-time when an employer hasn’t met their payroll and superannuation obligations.
Furthermore, STP does not only apply to just employees’ salary and wages. It also applies to other payments such as director’s fees and, with withholding obligations having to be calculated on a weekly, fortnightly or monthly basis, gone are the days when an employer could wait until year end to calculate how much to pay as a director fee or wages. This could result in the ATO levying a penalty against an employer for non-compliance with payroll and superannuation law. And to make the matter even more tricky, it looks like all employers will be required to use STP by 1 July 2019.
Not all is bad – this is a good opportunity for employers to get on top of their obligations and bring forward their tax planning for the year which can provide more relevant and timely information for their businesses. It’s important to get this right and understand your obligations as an employer in an increasingly regulatory environment. There’s no better time than now to setup an appointment with your accountant to discuss these matters in detail.
Should you require further information, we are always here to help. Please get in touch with our team.
Jamie Arrington – Manager