With the introduction of single touch payroll, small business owners (those with fewer than twenty either full or part-time employees) should be prepared for several tax changes during the new year. The most important of these revolves around STP, which will be mandatory after July 1st, 2019. The policy is now mandatory for larger businesses and some helpful advice from this experience should be useful for those who have not yet been affected. To get ready for this and other new tax changes in the new year, you need to update your single touch payroll software before the deadline arrives and understand what other changes you might need to make to your business.
However, to get behind the new policy and maximize the intended effects of its design, it is good to know what the benefits of such a program are. Whether STP benefits your business directly or the economic life of the country as a whole, it is important to know what the policy is aimed at to determine whether it is working effectively.
Continue reading to learn more about just some of the benefits of single touch payroll so that you can stay up-to-date.
Streamlined Reporting To The ATO
The primary and most obvious benefit of the single touch payroll program is the effective streamlining of your payroll information to the Australian Tax Office. This will save valuable time at the ATO with respect to information handling and will allow them to reduce the possibility of making errors and discrepancies with access to “real-time” data. All of this will streamline the communication process between small businesses throughout the country and the ATO.
More specifically, the ATO will now be able to use this payroll information to pre-fill business activity statements for small businesses. This will be a great benefit to you as it reduces the likelihood of an error being made which could result in penalties for your company.
Enhanced Access To Employee Information
STP will allow you to collect employee tax and superannuation information directly from the ATO, rather than having to pursue new employees to provide it for you. Your employees will also be able to access their payment summaries by themselves without having to issue them to each member of your team. This enhanced information sharing is part of a larger goal of being more visible and transparent in payroll processes. The automated mechanism of STP will also enhance employee salary and wage payments by allowing less margin for error. Payroll software that is equipped to handle STP changes will, of course, be far superior when compared to input this information manually.
Advancing The Digitisation Of Society
Whether you agree with the ultimate goals or not, STP is a move towards the digitisation of government. Taking advantage of and leveraging new technologies can improve the economic health of a country and can ensure that the business climate is a positive one.
If you have trepidation at the thought of learning a new system in order to keep your business running smoothly, fear not. There are many payroll software packages which can help you deal with the reporting requirements of STP. These are generally very user-friendly and come with support to help you navigate any confusion.
Keep Your Systems Updated For STP
Make sure to be ready for the implementation of STP for your small business later this year. Keep your payroll software updated and ensure that it complies with the new requirements. With the right preparations, you can participate in the new policy with ease and reap the benefits of this new system.