From 1 July 2019, businesses that employ less than 20 people will be required by the Australian Tax Office (ATO) to adopt Single Touch Payroll Reporting (STPR).
This follows the compulsory switch that took place on 1 July 2018 for businesses employing 20 or more people.
The Government initiative is designed to streamline business reporting obligations, and will change the way employers report their PAYG withholding tax and superannuation. STPR will offer most businesses the opportunity to improve and digitise processes and procedures.
WHAT STPR MEANS FOR YOUR BUSINESS
The main changes you will notice when adopting the STPR are:
- Ordinary Time Earnings, salary and wages, allowances, deductions, superannuation information and Pay-As-You-Go (‘PAYG’) withholding information will be reported to the ATO ‘real time’ when payroll is periodically processed by the employer
- Employers will need SBR-enabled software to comply with their STPR reporting obligations
- New employees will have the option of completing TFN declarations and Super Choice forms online
- The STPR reports for PAYG withholding will become the approved form for reporting PAYG withholding (currently this information is in the activity statement)
- Employers that have reported their PAYG withholding obligations via STPR will have their PAYG withholding prefilled by the ATO on their BAS
- Large withholders will no longer report PAYG withholding on their activity statement
- The ATO envisages that employers will be provided with the option to pay their PAYG withholding at the same time they lodge their STPR to further align the reporting and payment of PAYG withholding
- Employers will no longer be required to submit an annual PAYG Summary report to the ATO
- Employers may no longer need to provide payment summaries to employees, as the employees will have access to their payroll information via their myGov account.
BDO’S THREE STEPS TO BEGIN YOUR STP TRANSITION:
- Have detailed conversations with your accounting software provider/s to confirm whether the current payroll processing arrangements will support the changes
- Conduct a risk review of your current payroll procedures, including PAYG withholding, superannuation, car allowances and the timeliness of payments
- Review and monitor your HR processes to ensure employees are being treated fairly and paid correctly.
BDO recommends you understand how this change applies to your business and begin planning your roll-over to this new reporting requirement. Need help? Contact BDO’s Simon Abraham today: