There is a lot to consider when running your business. Especially when it comes to numbers and figures, it can be easy to feel inundated with information to ensure that you stay compliant. One of the biggest changes coming to small to medium businesses at the start of 2019 is Single Touch Payroll. Put simply, Single Touch Payroll will change the way businesses report wages and salary, PAYG and superannuation information to the Australian Tax Office. So, What is Single Touch Payroll and how will it affect you? We go over the main points of these changes and what you will need to do to stay compliant.
What is Single Touch Payroll?
Single Touch Payroll is a new regulation that is coming into effect this year that affects all businesses. It changes the way small businesses would report payroll activity to the Australian Tax Office. In the past, you would usually only report this information to the ATO once a year. However, due to these changes, you will need to send a report after each and every payday. These reports also must be submitted digitally using a specific format.
Changes to Reporting Your Payroll
In the past, payroll records for your business would be finalised and recorded to the ATO at the end of every financial year. You would usually provide a payment summary and report to the ATO which included information such as the salary that you have paid this year as well as any PAYG that has been withheld and superannuation contributions you have made. Each payment summary would be applied to each employee and would state what they received as a salary, payroll taxes collected from their pay and any contributions to their superannuation that you made on their behalf. Due to the change to Single Touch Payroll, this payment summary annual report and employee payment summary will no longer be needed.
Your Payroll Reports Will Need To Be Online
Due to these changes, there will be no more paper forms for reporting your payroll activity to the ATO. All paper activity will need to be submitted online using a format that is known as Standard Business Reporting. Depending on the way that you currently do your payroll, you may need to look at changing your payroll software or finding a service provider who can ensure you stay compliant. Naturally, Xero has single touch payroll functionality and will be compliant.
When Does Single Touch Payroll Start?
The Australian government officially passed legislation of Single Touch Payroll to all employers on the 12th of February of 2019. The first phase of Single Touch Payroll was mandatory on the 1st of July 2018 for all employers with 20 or more employees. With the new changes, Single Touch Payroll will now be mandatory for all employers with 19 or fewer employees starting from the 1st of July 2019. Although it isn’t compulsory until July, you can voluntarily move to Single Touch Payroll ahead of time to ensure that you are compliant and you are ready for the changes.
What Are The Benefits of Single Touch Payroll?
Instead of providing your payroll information to the ATO once per year, you’ll be able to save valuable time around the end of the financial year by reporting at every pay run process.
You’ll also no longer be required to generate payment summaries to employees as this will all be available online via their myGov account. If you do expand your business and take on any new employees, you’ll also be able to get them started quickly and easily with online commencement forms such as their Tax File Number Declaration and Superannuation choice forms.Are you ready for Single Touch Payroll? If you need any assistance ensuring your business stays compliant for Single Touch Payroll needs, get in touch with the team at Diverse Business Consultants today. We can help with all of your payroll needs and ensure your business runs smoothly. Or, for more information about Single Touch Payroll, click here.