Wednesday, 8 Dec 2021
Single Touch Payroll (STP) is a mandatory obligation for businesses that helps them to bring down their payroll reporting responsibilities. The Australian Government introduced the system in 2018 for businesses with 20 or more employees, and by 2019, it included ventures with 5 to 19 workers.
Since it is a relatively newer concept for entrepreneurs, they have been struggling to prepare for STP. Thus, bookkeepers Melbourne have been helping them to get ready for reporting through STP to avoid penalties.
The system sends tax and super information of employees to the ATO every time they are paid. It has helped in doing away with manual data entry, lodging documents at the office, and human errors. Thus, you need to be sure whether your business in Melbourne is ready for STP or not. Let us find out how you can determine the same.
With the implementation of STP, businesses in Melbourne continue to pay their employees in the same manner as they did before the introduction of the solution. They must use a STP-enabled payroll software that sends information about the salaries, wages, PAYG withholding, and super liability to the ATO.
The STP Phase 2, which will come into effect from 1 January 2022, will bring changes to the way of reporting the amounts mentioned above to include more information being sent to the ATO. The Phase 2 marks the expansion of STP to get rid of the obligation of reporting employee information to various government agencies. It will also aid in supporting the administration of the social security system.
The ATO is working with digital service providers in Melbourne to update the systems to accommodate Phase 2 reporting. Businesses which will not be able to get ready for phase 2 by January 2022 will have to apply for deferral if they need more time besides the deferral provided to the digital service providers.
The STP Phase 2 solution will include information that the ATO requires from the businesses in Melbourne. The additional data will include details of the payments made to the employees. It will inform the office about the type of payment, whether it is salary, wage, or working holiday payment.
Also, they will be informed about the components of the payment, such as gross pay, allowances, paid leaves, overtime, etc. The Phase 2 solution will tell the ATO about the amounts the business has withheld from the payments made while reporting PAYG withholding.
It will entail specifics about the method of calculating the amount by the bookkeeper which will include sending a copy of the TFN declaration of the employees. In addition, Phase 2 will also have information about super liability.
If you have been using concessional reporting until now, it is time to get a STP compliant payroll software. Many of the service providers in Melbourne are covered by a deferral, which will keep you safe from penalties after January 2022. For example, Xero partners and customers are covered until December 2022. Still, you need to get ready for STP. So, use the checklist given below to get started.
Your bookkeeper will help you find a way to report through the STP as it is related to the size of the business and the correct use of the payroll software. The data can be submitted by the bookkeeper or by the service provider in Melbourne.
With the last date for the implementation of STP Phase 2 knocking on the door, you need to speak to your service provider and find out about the update and how it will send the additional information to the ATO. Also, find out the type of support required for transition to Phase 2.
The bookkeeper must inform the employees about STP Phase 1 and 2 to get rid of any doubts or apprehensions. In addition, the bookkeeper must be well-versed with the updates and ensure that the salaries and wages are calculated correctly, the super entitlements are error-free, the overpayments are getting tackled, and the records of all the employees in Melbourne are updated to include any changes in addresses and phone numbers.
Also, the employees must be told in advance that they will not be getting any payment summary and they can check this information through the myGov portal.
If your STP solution is ready, you must start reporting without any delay to avoid getting penalised by the ATO. Since it is a new beginning for many business owners, the ATO will allow bookkeepers to make corrections to the reports in the first year of reporting if required.
The STP-enabled software must connect to the ATO via a software, a machine credential or sending service provider to get the data delivered. To allow your bookkeeper to authorise the STP reports, you will have to give them the authority for the same.
The business owner in Melbourne also needs to name the bookkeeper as the contact person in the STP pay event report. You must begin reporting by 31 March 2022 if everything is in place and you do not need any additional time or deferral.
If you have been worried about implementing STP Phase 2, do not worry. Your bookkeeping company in Melbourne can help you to become compliant and start reporting as per the obligations.