Companies with more than 20 employees are already familiar with Single Touch Payroll Reporting and this new way of submitting payroll - they've been doing it since it was made a regulatory requirement in July 2018. Businesses with 19 employees or fewer, however, now need to prepare for the gradual transition from 1 July to 30 September 2019, noting that further time is available to employers of closely held payees.
To help businesses understand one of the most significant changes to employer obligations, BDO recently invited Leanne Conroy, Assistant Director Single Touch Payroll - Superannuation and Employer Obligations, Australian Tax Office, to speak at our ‘BDO & ATO Single Touch Payroll Reporting (STPR) Seminar’, held at the end of May 2019. She gave us some unique information straight from the ATO about where to start with STPR.
What is STPR?
Employers using STPR send all their employees' tax and superannuation information directly to the ATO each time they pay their staff. This makes employer superannuation payments more visible to the ATO, which can then highlight instances where employees aren't receiving the correct contributions or where withholding tax appears to be incorrectly calculated on gross wages. It also streamlines reporting for employers.
STPR: Where to start? Advice from the ATO
Leanne mentioned how many businesses are already embracing STPR. Currently, there are over 104,000 employers reporting STP every time they run payroll - and this figure is rising every day. The greatest piece of advice Leanne gave in terms of how employers can start preparing for STPR is simply to get into the system. Make sure your software is STPR-enabled and experiment with it - this will give you time to ensure you're complying with new reporting regulations correctly.
“We don't have penalties for the first year, so it's a good time to start testing out how you run the reports and how you can fix mistakes,” says Leanne. If the ATO sees anything that's out of the ordinary, it will contact the employer directly to check whether everything is okay and why there might have been a discrepancy. The approach will centre much more on support than on penalties. Where mistakes do occur, the ATO will help employers recognise these themselves, so that eventually the ATO's assistance won't be necessary.
What about very small employers?
STPR can seem like a difficult process for businesses with very few employees, especially if they are worried about the cost of using STPR-enabled software. Fortunately, the ATO has an 'STP Solutions' sectionon its website that includes a list of software that costs less than $10 a month and doesn't require the employees to spend more than a few minutes completing. This list includes a number of free solutions.
What if you need more time?
If you need more time to prepare for STPR, the ATO also has a comprehensive deferral process. For example, if you're still looking at software solutions, you may wish to apply for a deferral for another three to six months.
Note that, although 1 July 2019 is the deadline set in legislation for employers with fewer than 19 employees, the ATO is being lenient with employers implementing STP and employers only need to apply for a deferred start date where STP reporting is not in place by 30 September. If you need more time than this, you can submit a deferral request via the ATO website.
Do you need more information about STPR?
The ATO appreciates this is a significant change for many employers, which is why it has uploaded a wealth of resources on to its website. In addition to monthly webinars, the ATO is also coming out to businesses directly to answer any questions they may have. Leanne encouraged businesses to communicate with the ATO as much as possible - they are there to help and are seeing this first year as a time not to be heavy-handed with compliance, but to provide as much support as possible.
BDO also has resources for businesses wanting to know more about STPR-compliance. Contact us today for more information or download our STPR 5 step checklist below.
STPR 5 step checklist