BIG BROTHER IS WATCHING… What is Single Touch Payroll? How is it beneficial for the employers?
Single Touch Payroll has been in the pipeline for a few years now but recently the ATO has made it mandatory for the SMEs to adopt. Usually businesses report the payroll only once a year to the ATO, whereas now they are required to do so after each pay in a digital format while using a specific arrangement called Standard Business Reporting (SBR). This move by ATO signifies to make the Australian tax system smarter, more automated and more efficient.
The Benefits to the Employer:
For employers like you, once the changes are applied and understood, there are several advantages under the new system:
- Once the STP is fully online, you will no longer need to provide annual pay (PAYG) summaries to your employees. You will not have to prepare the annual reconciliation to the ATO. This will reduce your administration and compliance overhead.
- The STP data that you provide will allow the ATO to pre-fill the BAS PAYG amount maintaining that element accurately from your behalf.
- You no longer would need to provide a payment summary to your employees. The ATO will make it available for them at myGov, so they can access it easily anytime anywhere. This increased visibility will give your employees more insight of their own for their tax positions.
However, make sure there are no mistakes while providing the information through STP as it would be difficult to change. Adjustments could be done at the end of the year but it will be very easy for the ATO to track them now.
Be aware that the Payroll is linked to Payroll tax which is also linked to Worker’s Compensation insurance. Hence, be prepared for Audits from any of these departments as they talk to one another automatically.