Tuesday, 11 Jun 2019
You might have heard a lot about the Single Touch Payroll (STP) and may have even tried to solve the enigma. If it seemed a bit overwhelming, here is what you need to know. STP was introduced by the Australian Taxation Office (ATO on the 1st of July 2018 as a new payroll reporting obligation to streamline the payroll and superannuation data.
It is a significant change which became mandatory from the 1st of July 2018 for businesses employing more than 20 workers. In the second stage of its roll-out, it will come into effect for those entities employing less than 20 people starting from the 1st of July 2019. So the big question is, are you ready for single touch payroll?
Well, if you still can’t get your head around it, you must consult the best bookkeeper in Sydney for the details and required assistance. To put things into perspective, let us help you in understanding how you can prepare for it and become STP compliant.
In a nutshell, STP is the government’s endeavour to maintain transparency and enhance the level of compliance by making the reporting process more straightforward and automated. Also, it will ensure that real-time data is shared with the ATO.
For instance, the moment you make payments to your employees, an electronic message will be sent to the ATO which will have all the details regarding every worker’s wages, salaries, tax payments, and superannuation.
The payroll software used by your bookkeeping company will be used to report PAYG withholding for every pay cycle instead of providing the information in the Business Activity Statement (BAS) as done earlier. To ensure that you are ready for the compliance, read this get-ready checklist given below.
You need to identify the reporting method through STP, which will primarily depend on the size of your organisation in Sydney, and the payroll or accounting software used your bookkeeper. If you are using Xero accounting software, then you don’t have to worry as it already has the STP feature.
Various other software providers are following suit and making their software STP compatible. You can consult your bookkeeper to get the right product for your business requirements in Sydney.
If you own a micro entity with four or lesser employees, you can rely on the no-cost and low-cost solutions for STP. These are a big help for those micro employers who do not have access to STP-ready software.
You need to get in touch with your payroll software provider in Sydney and check how it will be taking care of the STP reporting. It can take place with the help of an update made in the existing software or by providing an additional service.
Whether you are located in Chatswood, Randwick, or Parramatta, you need to find out if they have a deferred start date for STP reporting which must include you as an existing client.
Ask about the support offered by the provider during the transition and stay connected with them through emails or newsletters for the latest updates and upgrades in the software.
Make sure that your in-house bookkeeper is well aware of the STP reporting changes and get him trained in the updated software as it will be needed for payroll management.
You must ask your bookkeeper to check the data and calculations thoroughly to make sure that you are paying your staff appropriately, assessing their super entitlements without any errors, tackling overpayments efficiently, and maintaining the accurate personal information of the employees such as names, addresses, date of birth, etc. Getting rid of the inaccuracies will allow you to report correctly.
Businesses, which have more than 20 employees, have to report through STP or they can apply for deferral online on the ATO website.
Whether you are located in Chatswood, Randwick, or Parramatta, your bookkeeper must follow all the guidelines provided by the ATO and submit all the required evidence as deferral is offered only for extenuating circumstances.
Similarly, if small businesses with less than 20 employees are not ready to commence reporting by the 30th of September 2019, then they will also have to apply for a deferral.
The ATO has a long list of employer reporting guidelines which will help you to understand the obligations related to STP.
It has all the information about preparing the report, submission time, regulations related to reporting, making corrections, transitioning to STP, remitting PAYG withholding, etc. Your bookkeeper must be on top of these rules and regulations and have them instilled in his working system.
Once you have managed to get the updated software installed and ready, you need to start with the reporting process. The ATO will provide its support to businesses in the first year of reporting as it will be the transition phase.
Also, any errors made in the reports will not attract penalties in the first year. The payroll manager, a third party or your bookkeeper must authorise the reports on your behalf if you are not going to do it yourself.
The third party must be linked to the business at the ATO during the initial set-up. The agent will also have to be authorised for every pay event which will be lodged by them whether they are located in Chatswood, Randwick, Parramatta or any other suburb in the city.
You can do it yourself or make another entity in your head office responsible for the job by signing the Cross entity authorisation nomination form (XEA). On the other hand, if a registered agent like the bookkeeper, BAS agent or payroll manager will be submitting the reports then they must record their RAN in STP pay event payload and connect this relationship at a role level with the ATO.
The payroll management software can be linked directly to the ATO using a device AUSkey or a software service ID (SSID). The SSID must be provided to the ATO to ensure the STP report is received successfully.
Additionally, your sending service provider (SSP) in Sydney can also connect the software to the ATO. You will also have to appoint a contact person who can be contacted by the ATO in case of any queries.
The status of the report must be determined after its submission to check whether it was successfully received by the ATO or not. If there are any error alerts, they must be rectified using the software. Your bookkeeping company in Sydney can assist you in the process and check the accuracy of the data.
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