Do you want to know about Single Touch Payroll (STP) and ensure you are compliant, minimise the amount of work required and minimise the cost and you don’t already have something in place?

The ATO deadline is 30 September so you need to ensure you have something in place by then.

For many businesses, there will be more work to do, more cost and the need to move to new software, leaving many business owners annoyed at the prospect.

There’s no doubt setting up STP can be annoying and may incur extra expenses, especially for businesses who already fully comply with their ATO obligations and now need to add this extra step in. However, there are things you can do to make it relatively painless. Here’s a quick three-step process;

  1. Consider applying for a deferral before the 30th of September, 2019. The ATO state that deferrals will be considered if you;
  • need more time to start STP reporting
  • are unable to get ready by your software provider’s deferred start date
  • are transitioning to a new STP-enabled solution
  • are using customised payroll software and need time to configure and test it
  • have complex payroll arrangements and need additional time to transition
  • have entered administration or liquidation
  • have been impacted by a natural disaster
  • are affected by other circumstances out of your control.

So if any of these refer to you, you may be granted a deferral. Your tax agent can apply on your behalf.  However, there will come a time when you need to move over to STP, hence the next step.

2. If you don’t already have STP-enabled payroll software, set up Xero’s payroll software and start reporting from $10 per month.

Xero’s payroll software is pretty easy to use. It’s not the best part of their software but if you don’t have STP software, you may as well use the best accounting software as you can easily move from the STP solution to also using the accounting system.

Xero’s solution connects automatically to the ATO, so you can file STP reports with the click of a button. From experience, this process hasn’t been seamless for some businesses due to ATO connection errors that have required multiple calls to the ATO to fix an ATO issue rather than a Xero issue.

The only issue with Xero is that the cost increases as employee numbers increase, so you may want to consider other software options. However, from a quick review of other providers, pricing is generally based on employee numbers so this increased cost for businesses with more staff looks to be across the board.

If you don’t want to report with each paycycle and have four or fewer staff, you may be able to consider step 3, applying to the ATO to report on a quarterly basis. However, you will still need to report through STP enabled software and provide year to date wage information so in reality, you may as well report with each paycycle once your software is established.

The next steps are either to set up Xero at https://www.xero.com/au/resources/single-touch-payroll or  get your tax agent to contact the ATO and apply for a deferral or consider other software options at https://api.gov.au/productregister/.

If you don’t already have payroll software, it may help you keep track of employee leave balances more easily and could save time if you have been calculating wages with a manual process.

If you need a hand with setting up Xero, please don’t hesitate to contact me.