Will your business need to comply? Will your accounting software be ready? We answer your questions.
From 1 July 2018, Australian employers with 20 or more employees will need to use Single Touch Payroll (STP) enabled software to report employees’ tax and super information to the Australian Taxation Office.
Be careful – that’s not 20 full-time equivalents, it’s 20 employees of any kind.
Employers are required to conduct a headcount on 1 April 2018, which is to include all full-time and part-time employees, casuals who are on the payroll on 1 April and who worked any time during March, employees based overseas, employees who are absent or on paid or unpaid leave, and any seasonal workers.
Exceptions include independent contractors, workers provided by labour hire organisations, and company directors.
Accounting and payroll software is – or should be – being updated to meet the STP requirements.
There is provision for software providers to be granted a deferral if they aren’t ready by 1 July, and that appears to pass through to their customers. But if there’s some other good reason why your business can’t meet the deadline, it’s up to you to obtain a deferral from the ATO.
MYOB says it “is working closely with the ATO to ensure our products keep all of our clients compliant”, although “clients who are unable to move to an STP-enabled version of AccountRight, because they are currently using multi-currency, negative inventory, M-Powered Payment or ODBC and those using AccountEdge, have been granted an STP reporting deferral until 31 May 2019."
QuickBooks Online “will definitely be ready before July 1, 2018” according to the company.
Reckon has said “STP will be available in all Reckon software with payroll programs when it becomes mandatory for businesses with over 20 employees from 1 July 2018.”
We could find no information relating to STP on Saasu’s website, although earlier this year the company did add payroll for a single employee to its Small plan.
Sage has said it will release STP-enable upgrades to its payroll systems this month.
Xero has previously said it will be STP compliant, but didn't commit to meeting the 1 July deadline.
If you’re a smaller business, don't get too relaxed – the government's plan is to extend the STP requirement to all employers from 1 July 2019. In any case, such businesses may voluntarily adopt STP.
One benefit of STP is that it means employers will no longer need to issue payment summaries at the end of the year.
STP obligations can also be met by using a tax agent to use the system to report on your behalf.