Australia approaches another digital bookkeeping milestone

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Australia approaches another digital bookkeeping milestone

The Senate has passed legislation requiring small businesses to move to Single Touch Payroll next year.

Legislation requiring small businesses to use Single Touch Payroll (STP) reporting from 2019 is a step closer to becoming law.

STP requires businesses to report employees’ tax and superannuation information to the ATO every time they pay them, so that the tax office can quickly detect underpayments or other discrepancies.

The practice has been compulsory for employers of over 20 staff since 1 July 2018 and more than 50,000 are already doing so.

Now the Senate has passed legislation which would require business with fewer than 20 employees to use STP from July 1, 2019.

There is an exception: from April 2019, businesses with less than four employees can opt to have their tax agent report their employees’ tax and superannuation details each quarter.

Online accounting software firm Xero recently pointed out that plenty of Australian businesses don’t have STP-capable software to comply with the upcoming reporting changes.

It surveyed 305 Australian businesses that had less than 200 employees, and found that one in five did not use software to process their payrolls.

Xero also found that of the businesses that didn’t use software to process payrolls, or that used a spreadsheet, 37 percent hadn’t thought about moving to a digital payroll program.

This month, the ATO plans to publish a list of low-cost digital payroll solutions, which will be available from July 2019.

Xero and MYOB have been publishing information to help their customers prepare for STP. MYOB is also running STP workshops.

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