Money

Single touch payroll confuses many small business bosses

Written by The ReReport
As seen in the Source link, written by dailytelegraph.com.au on 2019-07-09 01:38:15

A change in the way businesses report wages is just days away, but thousands of employers remain uncertain about what to do.

Payrolls are going fully digital for all employers from July 1, as the Australian Taxation Office’s single touch payroll system extends to businesses with 19 or less employees.

Single touch payroll sends tax and superannuation data directly to the ATO every payday, helping the tax office keep closer eye on employers and protect workers from bosses who fail to pay super.

It also marks the end of paper payment summaries (group certificates), which are replaced by online income statements.

However, multiple studies by cloud accounting companies in recent months have found that many business owners have little idea about STP or whether it affects them.

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media_cameraThe end of the financial year brings changes, including how businesses deal with the ATO.

Research by Intuit Australia found that more than half of microbusinesses — which have fewer than four employees — had not heard of STP.

A separate survey by Xero found that one in five small business owners don’t think STP applies to them.

Xero Australia national partner director Rob Stone said ATO figures suggested about 90,000 microbusinesses used no software at all when paying their staff.

“Smaller businesses have been known to use a combination of spreadsheets, ATO paper tax tables and shoeboxes of paperwork to process payroll,” he said.

“It’s often the reality for small business owners that they are too immersed in the day-to-day of running a business to have the capacity to stay on top of all of the new regulatory obligations.”

Tania Tonkin, a director at dmca advisory, says the STP changes will protect workers’ super.
media_cameraTania Tonkin, a director at dmca advisory, says the STP changes will protect workers’ super.

Mr Stone said there was plenty of support available for small businesses to handle the STP switch.

The July 1 changes affect around 700,000 small businesses, and ATO assistant commissioner Jason Lucchese said they had until September 30 to start reporting using STP.

“We have been writing to all small employers who have 19 or less employees over the past few months providing links to more information on our website including fact sheets, checklist and videos,” he said.

Mr Lucchese said the ATO had published a list of no-cost and low-cost STP options for micro employers, and would provide exemptions for some business owners.

“For small employers that make a genuine attempt to switch to STP, there will be no penalties for mistakes, missed or late reports for the first year.”

Tania Tonkin, a chartered accountant and director of dmca advisory, said cloud accounting software could also help business owners get a better handle on how their business was tracking.

“The purpose of this new rule is to make sure employers are paying superannuation to staff on time and accurately,” she said.

“It’s also part of bigger moves to encourage compliance and to crack down on the black economy.”

@keanemoney

Originally published as The big July 1 change that’s confusing bosses