Single Touch Payroll now mandated for all Australian small businesses

Small business owners in Australia are now encouraged to adopt the new “Single Touch Payroll” system which came into effect recently. This system is now required for all employers with less than 19 employees.

The Minister of Finance and Small Business Damien Tudehope said that the NSW Government had been assisting businesses to prepare for the “Single Touch Payroll”, i.e. STP with workshops via its Business Connect advisory service network.

Flourish Employment Solutions, provider of HR solutions in Australia explains Single Touch Payroll as an ATO initiative that requires employers to report salary and wages, PAYG withholding and superannuation to the ATO each time they pay their employees.

“Single Touch Payroll is the new way of automatically reporting tax and super information to the Australian Taxation Office (ATO) and starts from 1 July 2019 for employers with 19 or fewer employees.

“Employers will use Single Touch Payroll to electronically report their employees’ salaries and wages, pay as you go withholding tax, and superannuation information directly to the ATO each payday when they run their payrolls.

“Single Touch Payroll will benefit employers by streamlining payroll processes to reduce business costs and provide protections for staff by giving greater visibility to the ATO on unpaid superannuation or late payments.

“The new system will make completing paperwork easier for more than 250,000 businesses across the state by automating much of the payroll process and help them stay on top of their financial affairs. Each time you pay an employee and report through Single Touch Payroll, their tax and super information will be updated on the myGov website.

“The good news is the ATO advises there will be no penalties for mistakes or late reports for the first year, and if you are experiencing hardship or operate in an area with limited internet capabilities, there will be exemptions available,” Mr. Tudehope said.

Michelle Smith, the Office Manager of the Tree Surgeon (an arborist business based in Orange) attended the conference at the Business Connect Provider Central NSW Business HQ, commented that the session had helped her implement STP using Xero accounting software.

Meanwhile, Dean Squire an ex grain industry worker, and co-founder of Cootamundra business Desi’s Fabrics and Blinds, attended a workshop with Business Connect provider BEC Advice South and West.

“Single Touch Payroll will be easier when doing our payroll as currently we manually do our tax and super each week and this will do it in one hit,” he concluded.