All the Aussies are at the end of Single Touch Payroll Reporting implementation being implicated to all the employers including substantial employers and small employers. Indeed, this is one of the most significant changes to reporting systems for businesses since GST Introduction on July 1, 2000.

As per the STP rules, an employer would report information for their employees’ salaries and wages, PAYG withholdings and superannuation to the ATO parallelly with the Payroll Cycle.

Current STP Data

As per the records till June 2019, 137, 000 employers were reporting through STP with 55, 000 substantial employers and 82, 000 employers whilst covering 7.5 million employees.

So, as the nation is progressing towards filing through STP, let us peep into the myths that are buzzing around!

Myth Buster 1:

STP Reports can only be lodged via an STP-enabled software solution. There will not be any STP Reports Lodgements through agent or business portal, or via activity statements provided.

Also, the software solution would not be provided by ATO. This means that the employer or registered agent would have to acquire cloud-based STP Software.

Myth Buster 2:

No need for a headcount on April 1, 2019, as all the employees would be considered under STP Reporting.

No carve-out or blanket exemptions are devised according to the various niche of industries. All the business entities inclusive of not-for-profit entities would be required to perform payday reporting via STP, starting from July 1, 2019. Also, there is a special arrangement by ATO for micro-employers, employers with closely held payees, and employees with intermittent employees.

There are no general exemptions yet ATO has listed a number of legislative instruments exempting the following STP Reporting:

Myth Buster 3:

Employers would not make available income statement of employment.

Myth Buster 4:

An employee would not be prevented from their tax lodgement using unfinalized data.

In case, an employee is trying for tax return lodgements with not ready data, the same should be intimated to the employer at the time of the Finalization Declaration. This will ensure to confirm the income statements in different amounts and need to amend the tax return. Also, a tax bill amendment can result in Shortfall Interest Charge applied.

Myth Buster 5:

There is no compulsion to set up the MyGov account. But with login credentials, the access to data gets better.

Myth Buster 6:

No need to wait until July 1, 2019, for STP Reporting. Start any time!!

Many small employers may start late post-July 1, 2019. This can happen due to software issues or some other unavoidable circumstances. With the help of the employer’s digital service provider, the employer will get to know about the usage of STP.

Myth Buster 7:

The small employers need not apply for deferral until September 30, 2019.

In case the small employers are not ready with the STP Reporting by September 30, 2019, they would need to apply for a deferral. Tax Agents, Bas Agent Portal, or ATO Online Services can also do it.

Myth Buster 8:

For Micro Employers, who don’t want or need payroll/accounting software can choose simple and low-cost or no-cost STP Software Solution. There are various STP Solutions available for them so as to lessen the burden for the finances.

This is not the end. There are many more myth busters to come!

Till then, try not to believe in such a myth to ensure better accounting management and related decisions in an effective manner altogether.

To know more about Single Touch Payroll, please contact us at ankit.mehta@ascendum.com