How does Single Touch Payroll affect small business

Why the change

The ATO has tightened reporting of payrolls with electronic lodgement every time someone is paid, rather than annually.
Bluntly, more reporting equals more cross checking and catching up with irregularities.

Effective Date

The legislation is in force now – small business has untill September 30 2019 to comply.

Scope

Large business is already using STP. Small business is defined as less than 19 staff, and micro business as less than 4 staff. Micro-businesses can report quarterly under STP.

Payroll calculations

Tax and super rates are not affected by the new requirements.

Payroll Reporting and Activity statements

The payroll data on activity statements is a summary only – STP gathers payroll details on an individual basis.

Software

Businesses will have to use STP compliant software as the information is sent straight to the ATO business portals. This is a practical issue when setting up – getting the necessary identity clearances has proved time consuming.