Small business payroll upgrade
Thursday, 11th July, 2019
By Callum Marshall
The Australian Taxation Office (ATO) is encouraging businesses with staff numbers less than 20 to switch over to ‘Single Touch Payroll’ (STP), an online payroll system.
The system streamlines the payroll process by sending tax and superannuation information directly to the ATO through the businesses’ STP-enabled software or through a third party such as a sending service provider.
Last year, businesses with more than 20 staff members switched over to STP meaning that, this tax time, up to nine million employees will report without payment summaries, using the information available online at the MyGov online portal.
Local business owner Gary Spicer, of Spicer’s Office Choice, said he’d just switched them over to the new system.
“We’ve moved into but it won’t happen until this week’s pay,” he said.
“We’ve moved into it through our software Pronto, which is through Office Choice.
“They did the work as far as setting up the single touch payroll module.
“So all we had to do was get our act in order and it just took me half a day to check that everything was fine and ok.”
Mr Spicer said the new system would save him time in the future by not having to do group certificates and payroll summaries at the end of each financial year.
“It’ll save us (time) at the end of each year when we’ve got to do the group certificates and make sure it all balances and everything,” he said.
“Whereas now they just get done each week. It gets sent (and) we don’t have to do that anymore.
“So each week the tax department gets exactly what you pay and they know what you’ve earnt every week as an employee.”
The tracking of superannuation payments will be a key aspect to the system, with the ATO now able to easily identify when businesses don’t pay super or if they pay wages in an unusual way.
“I believe that’s one of the reasons they’ve gone to it, to make sure everyone’s paid the super,” said Mr Spicer.
“Over the years, I think there’ll be some who haven’t been.
“That’s going to be the interesting part I think.”
Mr Spicer said the introduction of the STP system would, like the introduction of Business activity statements (BAS), make things much easier for businesses down the line.
“A lot of people still hate the BAS and the GST but it’s the best thing that ever happened. It really is,” he said.
“You do your BAS statement every month, then you do your three-monthly as well, (and) you pay your tax-as-you-go.
“Budget wise, it’s so much easier.
“Before the BAS statements came in you paid your tax at the end of the year.
“It was a disaster because you got to the end of the year and you ended up with this great tax bill and you had to find the money to pay it.
“Whereas today you pay-as-you-go, and it’s so easy and so much better.
“And the BAS also forces people...to look at their figures every month.
“How much they’ve spent, how much they’ve taken in, (getting) at least ...some idea of how they’re going.
“Whereas some people never looked at that.
“And single touch payroll is just another extension of that I believe.
“It makes you sort of aware of what’s going on and it’s much easier.”