STP is incorporated into payroll and accounting software, which sends taxation and superannuation information to the ATO each time employers run their payroll. This increases the frequency of reporting periods to a weekly, fortnightly, or monthly basis. The ATO claims that the changes will streamline the process and improve their ability to ensure payroll compliance.
STP started from 1 July 2018 for employers with 20 or more employees, and legislation has been passed to extend STP reporting to all employers from 1 July 2019.
Employers will no longer be required to generate payment summaries for employees at financial year end, as this information will be available online via a myGov account.
Superannuation guarantee payments will be available for investment by super funds sooner than previously, thereby improving the potential returns on employee’s superannuation investments compared to when contributions were paid less frequently.
The changes also increase the need to rely upon accountants and bookkeepers in order to comply with the reporting format required by the ATO. It increases the costs to employers, particularly small businesses, as they will need to ensure their payroll system is STP compatible. This may also have negative effects on small business’s cash flow, as they will need to ensure PAYG withholding and superannuation guarantee payments are made every pay cycle.
There will also be greater scrutiny of businesses as the ATO will have access to even more information to match data to see if all Superannuation Guarantee Charges and PAYG withholding obligations are being met.
Irish Bentley Lawyers have significant experience in taxation law and are well-positioned to provide advice on the recent changes to single touch payroll. We have been successfully engaged to resolve taxation disputes involving multimillion-dollar companies and small businesses alike. We are able to assist at all stages of taxation issues with the ATO, and the sooner we are engaged, the better, as it is important with all tax disputes to be proactive, rather than reactive.
Please note that the above does not constitute legal advice and Irish Bentley Lawyers make no representations or warranties as to the accuracy of any of the information contained herein. If you have a taxation issue, then please do not hesitate to contact the team at Irish Bentley Lawyers – there is no substitute for proper legal advice based on your individual and unique circumstances.
Read more about the changes here: https://www.ato.gov.au/business/Single-Touch-Payroll/
Written by
Matthew Brouwers (LL.B, GDLP, B.BM)
SOLICITOR