Five tips to get your small business Single Touch Payroll ready
What is Single Touch Payroll (STP) and what do I need to do?
It’s a question many small business owners across Australia have been asking in recent months.
Summed up, STP is the biggest compliance event since the introduction of GST. It will become mandatory for small businesses with 19 employees or fewer from 1 July this year. Every time you pay your employees from this point on, their PAYG and super information will be immediately submitted to the ATO. This means you will no longer need to report these details separately at a later date.
Ultimately, STP will save you time and effort, as well as improve accuracy and minimise errors when you generate your payroll.
To take advantage of these benefits and make sure you’re STP compliant, you’re going to need to use accounting software like QuickBooks Online to submit your payroll information automatically to the ATO every time you pay your employees.
Cloud Base software
Still using paper ledgers and desktop spreadsheets to manage your payroll? You’re not alone. Many small businesses have yet to experience the benefits of cloud accounting software. In fact, Intuit Australia estimates about 50 per cent of Australian small businesses are not using cloud accounting software to run their business. If this includes you, treat STP as a good reason to get your books online and automated.
While this large-scale transition might feel daunting, making the transition will be worth it. Our customers tell us that they save an average of 40 hours per month using cloud-based solutions to manage their business finance. Here are five simple tips to help you get your business STP-ready:
- Get the right accounting software
If you aren’t already using cloud accounting software, make sure you choose a provider that is STP-enabled for small businesses. When doing your homework on which provider to go with, be sure to factor in what customer support they offer to help get you set up. And ask questions while you’re familiarizing yourself with the new system. Already using accounting software? Make sure they are STP-ready.
- Speak to your accountant or bookkeeper
STP has been live for businesses with 20 plus employees since mid-last year. Therefore your accountant or bookkeeper should have a good understanding of your compliance obligations and the software options that are available.
- Share information with your staff
STP won’t affect how your employees are paid, but it’s still important to inform them about what it is and how it applies to them. The main message for employees is that they should set up a myGov account (the Australian Government’s secure online service). This is where they can access their year-to-date payment summaries, as well as their super and tax information. It’s important that your employees know how to access this information. This is because as an employer you will no longer need to issue annual payment summaries to your staff once you’ve opted to lodge under STP. There are plenty of factsheets available on the ATO website that can help guide your conversations with your employees.
- Keep up to date with the latest news on STP
The ATO will be releasing useful factsheets leading up to 1 July. You can sign up to receive this information via email or follow the ATO on their social media channels. Visit the ATO website for more information. There’s plenty of easy-to-read information available.
- Now is the time to get organised
When STP comes into play, you will need to have all of your employees’ relevant personal information available as this will be electronically transmitted to the ATO. This information includes. Correct legal name, tax file number, address, date of birth, superannuation SPIN and membership numbers. It’s a good idea to review your employees’ information in advance to ensure you have all their necessary and up-to-date details
If you think your business might benefit from bookkeeping services. Maybe you need someone to lodge BAS. Perhaps you need a bookkeeping software health check, setting up your books. Then above all don’t hesitate to get in touch. We’ll tailor a package that sets you up correctly from day one.
Contact Timewise Financial Solutions on 0419 181 082 or by clicking here today.