Are you ready?
From 1 July 2019, single touch payroll – the direct reporting of salary and wages, PAYG withholding and superannuation contribution information to the ATO – will apply to all employers.
Employers with 20 or more employees have been required to use single touch payroll since 1 July 2018. The new rules require all businesses with employees to use the single touch payroll (STP) system. This payments made to the owners of the business in the form of salary, wages or directors fees.
There are new low- cost payroll options for micro employers (1-4 employees) eg. MYOB and Xero have announced new $10 per month offerings (limited to 4 employees).
While the start date for small employers will technically start on 1 July 2019, the Commissioner of Taxation released a statement indicating that small employers can actually start reporting through single touch payroll any time from 1 July 2019 until 30 September 2019. No penalties will be applied to mistakes, missed or late reports for the first year.
Plus, if your business is in an area with no viable internet connection, such as some rural and remote regions, then exemptions may apply.
Under 20 employees? What you need to do
If your business does not already use STP compliant software, you may need to upgrade your systems or implement new ones. if you are using payroll on well known software providers such as MYOB, XERO, Quick Books they are compliant.
STP requires PAYG withholding and superannuation contribution details to be reported to the ATO as payments are made to employees or superannuation funds.
What needs to be reported:
- Salary & wages
- Director remuneration
- Employment termination payments (ETPs)
- Unused leave payments
- Parental leave pay
- Superannuation contributions (at the time the payment is made to the fund)
- Salary sacrificed amounts (from 1 July 2019).
Under or Non-payment Of Super
Underpayment or non-payment of superannuation guarantee (SG) is a big issue. New laws will enable the ATO to advise employees (or former employees) of their employer’s poor SG payment and reporting history. If an employer makes a complaint to the ATO, then a tax officer is able to make a record or advise the employee about a failure or suspected failure by their employer or former employer to comply with their SG obligations. They can also amke the employee aware of the ATO’s response to the complaint.
If you have any concerns or questions about this or any other tax matter please give us a call and we would be happy to clarify your position.