STP becomes obligatory for all employers
Australian MPs voted on Tuesday to make single touch payroll (STP) mandatory for all employers.
The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 was passed on Tuesday, after it was sent back to the House of Representatives in late December.
The extension of the STP to employers hiring less than 20 staff means that nearly 800,000 businesses will now be added to the Australian Taxation Office’s rules.
STP is a way of sending tax and superannuation information to the ATO through payroll or accounting software each time a business pays its employees.
Before the bill, STP reporting was only required from businesses with 20 or more staff.
STP reporting started gradually on 1 July 2018 for substantial employers – those with 20 or more employees.
In January, the ATO said it had updated its list of companies intending to provide simple, low-cost STP solutions for micro-businesses.
It noted earlier that it has asked software developers to build low-cost STP solutions at or below $10 per month for micro employers – including simple payroll software, mobile phone apps and portals.
IPA supports extension of STP
The Institute of Public Accountants (IPA) supports STP and believes the introduction of STP for smaller businesses will bring major improvements to system integration and transparency.
The IPA earlier made a submission to the federal government supporting the implementation of STP, it said in its recently released Small Business White Paper.
The benefits to employers, the IPA said, lie in improvements to the employee commencement and reporting, as well as compliance benefits on the back of a more level playing field for employers.
“Employees will gain new transparency over their pay as you go (PAYG) withholding tax position and super contributions, as reported by employers each payday,” the IPA noted.