Changes to (PAYG) Tax Reporting
14th February 2019
By Clayton Coughlan
STP to cover all businesses as legislation passes
The extension of Single Touch Payroll to employers with 19 or fewer employees has finally passed both houses of Parliament on February 12th 2019, after amendments were tabled in late last year.
The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 secured passage today after it was referred back to the House of Representatives last December due to proposed amendments to other measures contained in the same bill.
This will mean that employers with 19 or fewer employees will have to report under STP rules from 1 July 2019. Businesses with 20 or more employees began reporting from 1 July 2018.
There are approximately 781,908 businesses with 19 or fewer employees in Australia. That’s about 36.8 per cent of Australian businesses, according to ABS data. Broken down, microbusinesses with one to four employees account for 584,744 of that total, and the remaining 197,164 are businesses with five to 19 employees.
The ATO has pre-empted the passage of legislation by contacting small business clients, informing them that they can start reporting if they have STP-ready software and to inquire with their tax practitioners if they have any questions.
In preparation for the rollout across all businesses, the ATO began seeking expressions of interest from digital service providers to develop low-cost STP software for the microbusiness sector.
It has since published an updated list of suppliers who will provide such solutions that are required to be affordable, costing less than $10 per month, takes only minutes to complete each pay period and does not require the employer to maintain the software. Click here for list.
ATO commissioner Chris Jordan has also pledged to ease microbusinesses into the STP regime, stating that they will not be forced into purchasing payroll software, with a number of alternate options set to be available, including the option of allowing their registered tax or BAS agent to report quarterly, rather than each time they run their payroll.
Exemptions to STP reporting will also be available to businesses that have no internet or have an unreliable connection.