Single Touch Payroll 'STP' - The biggest change since GST
On July 1, 2019 all businesses who have employees on payroll will be required to report their wages to the ATO each time they are paid. This new process is known as “Single Touch Payroll” (STP).
What does this mean for you?
Everyone will now need to report electronically using an ‘STP’ compliant software provider starting from the first payslip after July 1, 2019. **
You may also need to register for an Auskey (a link to the Auskey registration is provided in Additional Notes)
**There is a small concession for businesses with 1-4 employees need only report each quarter, but this still requires a subscription to a provider as above. This is also only valid until July 1, 2021 so it is unavoidable.
Why is this being introduced?
A short list to a long and complicated answer:
Identify Superannuation payment shortfalls
Real time reported earnings with Centrelink and other agencies to help reconcile benefits earlier
Eliminate the need for PAYG Summaries (Group Certificates)
Streamline the paperless economy
Speed up the lodgement processes
What is the bottom line?
In the short term, the transition to this new process will be both time consuming and costly. The online Accounting Software providers stand to gain a significant uptick in new subscriptions. There is also bound to be errors, software crashes and likely the ATO systems will crash with the influx of new data. This however has not stopped them in the past and will likely not postpone anything in the future. During this transitional period, they have mentioned that there will be no fines in the first 12 months, but I would take this information with a grain of salt. Currently, the average fines for a late BAS lodgement hovers around the $800 mark.
What are my options?
Below we have highlighted 3 options we think are best fit for your organisation if you pay wages
OPTION 1 – Handle it yourself
We have identified 3 products below for you to investigate and alongside it have linked a recommended training session to get you up to scratch. Please note that this is not a full list, but it is our recommendation.
MYOB Essentials Payroll (not to be confused with ‘MYOB Essentials + Payroll’)
MYOB offers a payroll only option for $10 a month to help you with STP reporting
Software subscription:
Cost: $10 per month ($120 per year)
Training course:
Cost: $250 (one off fee)
Notes – Although MYOB are charging $250 for training, it is a face to face workshop, and you will be taught how to process correctly.
Notes – This $10 subscription only covers 4 people on Payroll
XERO – Payroll only
XERO offers a payroll only option for $10 a month to help you with STP reporting (this is currently under development but expected to be completed later this month)
Software subscription:
Cost: $10 per month ($120 per year)
Training course:
Cost: Free
Notes – the Training offered by XERO is all online which may be of use to some but to others who need face to face it may not be the best option.
Other Providers
Linked below is a list of providers that offer or will offer a service to help you become STP compliant. Some of the tools are free & others will range up to $10 a month.
Training: we would recommend you utilise the training based on the software you choose
Notes – We do not have first hand experience with any of the listed software other than MYOB & XERO so users beware.
OPTION 2 – Get Regans to do your payroll
We recognise the nightmare that STP reporting may pose for several of our clients. We thought it’s best to at least offer a solution where we handle the drama for you. We already handle Payroll for many of our bookkeeping clients, and we can now extend Payroll out to our non-bookkeeping clients as a way to navigate STP.
This new service would include the following:
Weekly/Fortnightly/Monthly pay-run cycles (depending on your preference)
Electronic Payslips emailed
End of year PAYG reconciliation (staff Group Certificate electronically lodged)
Superannuation Obligation Payments & Compliance
We pay your MYOB Subscription
COST - $150 Per Month + GST (1-4 employees) or $700 per Quarter + GST if we already lodge your BAS and will be added on top of your BAS charge. Additional charges may apply for employees exceeding 4.
OPTION 3 – Get Regans to do Everything (Bookkeeping)
This option may be particularly enticing for clients who we still do a manual bank reconciliation on a yearly basis. This new initiative of STP by the ATO is basically forcing people to take their record keeping digital in order to remain compliant and avoid penalties.
This service includes the following in relation to being STP compliant:
Weekly/Fortnightly/Monthly pay-run cycles (depending on your preference)
Electronic Payslips emailed
End of year PAYG reconciliation (staff Group Certificate Electronically lodged)
Superannuation Obligation Payments & Compliance
We pay your MYOB Subscription
This service also includes our bookkeeping services:
Lodgement of Monthly IAS
Lodgement of Quarterly BAS
Lodgement of Annual BAS
Reconciliation of financials on a monthly basis
Ability to invoice digitally
Quarterly Performance Reports
Ontime lodgements to avoid penalties
COST - $800 + GST Per Quarter (1-4 employees). Additional charges may apply for employees exceeding 4.
Note: For many of our clients who we already do a manual BAS for each quarter, the charge is already $250. It requires you to collate all your bank accounts manually and drop it off every three months. Whichever option you choose to go with regarding being STP compliant, your costs as a result in the short term will rise. However, we believe that over time, the efficiency of this new system, particularly if you decide to utilise our complete Bookkeeping service will outweigh the cost
ADDITIONAL INFORMATION
For more information please visit these links or call these numbers:
AUSKEY Registration - https://abr.gov.au/AUSkey/
AUSKEY HELP – 1300 287 539
ATO HELP – 13 28 66 (Have your ABN & TFN for business handy)
