What does Single Touch Payroll mean for your Small Business?Tim Covark
Single touch payroll (STP) is a system that the federal government wish to implement which will help to streamline business tax and superannuation reporting for small businesses. STP was originally planned to come into action on 1 July 2016, but has now been delayed until June 2017.
Pay As You Go
Currently, employers manually report Pay As You Go (PAYG) withholdings to the Australian Tax Office (ATO), but under the new STP system, this information will be automatically reported to the ATO through Standard Business Reporting (SBR). In addition, employers will also have the option to pay their PAYG withholding at the same time that they pay their staff.
If all goes according to plan, the change will mean that employers will not longer have to report employee related PAYG withholding in their activity statements throughout the year and employee payment summaries at the end of the year.
Reporting of superannuation contributions will also be automatically sent to the ATO when payments are made. The requirement for reporting super contributions to funds under SuperStream will not change with the introduction of STP.
The Minister for Small Business and Assistant Treasurer, Kelly O’Dwyer, announced in December that the government will conduct a STP pilot in the first half of 2017 with a focus on small business.
To help out small businesses who earn less than $2million, the government is planning to offer a $100 non-refundable tax offsetfor SBR-enabled accounting software. This offset will apply from 1 July 2017, and will apply to software purchases or subscriptions made in the 2017-18 financial year only.
Keep an ear out for updates as the time to implement Single Touch Payroll draws closer. There is more information available at the ATO website.