At the recent Xero Roadshow, Trent Innes (Managing Director of Xero) kicked off his session with “Single Touch Payroll is set to be the biggest change to Australian businesses since GST“.
This change has already been rolled out to the larger organisations as of last financial year. However there are small businesses, many of which are small family operations where the founders pay themselves, don’t believe they have much to gain by adopting STP.
What is Single Touch Payroll?
Single Touch Payroll is an ATO initiative that will require ALL employers to report salaries and wages, PAYG withholding and superannuation to the ATO each time they pay their employees.
Instead of typically reporting payment once at the end of a financial year, if you’re an employer, you’ll have to send information to the ATO with every pay run.
Do I have to do it?
If you have at least 1 employee then YES! Its a legislative change that the ATO have pushed across the board which you will be required to comply with by 1st July 2019.
Don’t Get Caught Out
Based on the Single Touch Payroll blog Xero pushed out last year to employers with 20+ employees, its easy to believe that STP is simply a matter of turning on the reporting feature and clicking ‘File’. However, you may get caught out on numerous issues if you leave it till 31st June.
You still need to Opt In
Even though STP is being rolled out and pushed by the ATO, businesses still have to opt in to Single Touch Payroll. This means that your accountant will need to contact the ATO to setup the STP lodgement OR if you lodge your own BAS, then you can do this yourself.
Instructions on opting in yourself can be found in this video above at the 1-minute mark.
Time to Digitise, if you haven’t already
For the a large part of the market, businesses are equipped with digital payroll software to process payroll. But for those without, ATO are forcing you to digitise your payroll with their legislative change. If you are currently using spreadsheets or desktop software that is not STP compliant, now is the time to convert to Xero.
What if I don’t want to sign up to the business version of Xero?
Xero announced at their roadshow that they will be making a Xero Payroll Only subscription available to those with 1-4 employees. If you have a Xero GST Cashbook subscription (available via Xero Accounting Partners), the payroll only subscription can be added to that.
At the time of this blog, there is no official date on when the Xero Payroll only subscription will be available. But if you’d like to keep updated, please send through your details here. OR if you’re not on Xero yet and have heard great things about it, we can sign you up.
Making changes to pay runs outside the payroll period
If you spot a mistake in a pay run that you’ve filed with STP, you can still make a correction WITHIN the payrun period by just reverting the pay run, making the required changes, then post & file.
However, if you have realised the mistake outside of that period, you have a couple of options here:
- Complete an unscheduled pay run
- Fix the mistake in time for your next pay run
Instructions on how to do this in Xero is here.
Employees to set up a myGov Account
Businesses will no longer be required to provide payment summaries (* with the exception of some circumstances) as all this information will be filed via STP. Employees are recommended to setup a myGov account to access all payroll details, including their year-to-date tax and super information. More information can been found here about setting up a myGov account.
We understand that with running any business, payroll processing can be a time consuming task especially when you’re the owner of multiple businesses. We can alleviate that time by processing the payroll for you. Our payroll team are equipped with the skills to bulk process your employees information, helping you gain the time back concentrate on other areas of the business.
If you are in the Trades, Retail or any industry that handles timesheets for your employees, rostering & scheduling is a key way we can help you gain payroll efficiencies, ensuring you pay staff the correct amount every time as well as ensuring you are keeping your staff costs on track.
We partner with employee scheduling apps which syncs smoothly with Xero Payroll, making it easier than ever to keep your Xero Payroll updated with the most up-to-date and accurate information, for STP reporting purposes.
Get Onboard Now
Its going to be a huge rush for a lot of small businesses coming up to July which could cause some chaos. Now is the time to adopt the changes to allow yourself a few months to get into the rhythm of filing and nut out any problems that may arise.
If you have any STP questions or would like to know more about how we can help eliminate the time you spend processing your payroll, request a call back from one of our STP heroes.
* Please contact your accountant to see if you will be required to provide payment summaries.
Originally Posted by Angie Poole at ZeroBooks.