The Single Touch Payroll deadline for employers has been extended to 1 July 2019. From this date onwards, single touch payroll will be applicable to all employers.
Single touch payroll (STP) is the direct reporting of salary and wages, Pay As You Go (PAYG) withholding, and superannuation contribution details to the Australian Taxation Office (ATO). What business owners need to report will also include specific salary sacrificed amounts.
As mentioned here in one of our earlier articles, businesses with 20 or more staff have been obligated to utilise STP since 1 July 2018. The new STP guidelines will drive all employers into the single touch payroll system. This will involve scenarios where payments for services rendered are made to the business owners such as salary, wages, as well as directors’ fees.
The ATO has talked with software providers to offer new and inexpensive payroll solutions for micro employers who have 1-4 employees. Xero and MYOB have complied and have introduced $10 monthly fees for their software to help micro employers.
In addition, the ATO said that to further assist micro employers, there will be “a number of alternate options that are not available to employers with 20 or more employees, such as initially allowing your registered tax or BAS agent to report quarterly, rather than each time you run your payroll.”
Even though the STO commencement date for small business owners will officially start on 1 July 2019, the Commissioner of Taxation, Chris Jordan, released an announcement suggesting that small business employers can in fact start STP reporting anytime from 1 July to 30 September 2019. There will be no charges or penalties implemented to errors, missed or late reports for the first year.
Furthermore, if your business is in a location where there’s no workable internet connection like a few rural and remote locations in the country, exemptions may apply.
For businesses with under 20 employees
In the case that your business is still not using STP compliant software, upgrade or use compliant software as 1 July 2019 is not that far away.
STP obligates employers to report the details of salary and wages paid out to employees in addition to the PAYG withholding amount at the moment a payment is made to a staff member. Owners can choose to pay the PAYG withholding liability at the same time. Although, this is optional.
Information that needs to be reported
- Salary & Wages
- Director remuneration
- Return to work payments to individuals
- Employment termination payments (ETPs) – not compulsory if the employee has died
- Unused leave payments
- Parental leave pay
- Payments to office holders
- Payments to religious practitioners
- Superannuation contributions (at the time the payment is made to the fund)
- Salary sacrificed amounts (from 1 July 2019)
Employers with poor Superannuation Guarantee payment and reporting history
Underpayment, as well as non-payment of Superannuation Guarantee (SG), is a major concern for the ATO. Updates in legislation will make it possible for the ATO to inform employees or former employees of their employer’s poor SG payment and reporting history.
In the event that an employer files a complaint to the ATO, then a taxation officer has the ability to create a record or inform the employee regarding a failure or suspected failure by their employer (or former employer) to abide by their SG responsibilities. In addition, they are able to share the Tax Commissioner’s feedback to the complaint. Therefore, if the Tax Commissioner discovers that there is an issue with the SG payments, they can reveal this information to the complainant.
If your business needs assistance with anything regarding single touch payroll, contact your nearest Chan & Naylor business tax accountant here.
Aside from helping you to become single touch payroll compliant, have a look at our other accounting and advisory services that we do to help you achieve greater financial success.
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The Chan & Naylor Group has national offices in North Sydney, South West Sydney, Sydney, Pymble and Parramatta in New South Wales, Melbourne, Moonee Ponds and Hawthorn in Victoria, Brisbane and Capalaba in Queensland, and East Perth in Western Australia that can assist you with the Single Touch Payroll deadline. Contact us today.