More than 700,000 Australian employers will be impacted by Single Touch Payroll (STP). Since its rollout, there’s been quite a few myths flying around about STP and what it means.
Did you know that more than 100,000 employers are now reporting through the new system?
Even so, there is still a lot of uncertainty and confusion around what changes are required for employers and how it will impact their business.
We’re here to bust three of the biggest myths surrounding Single Touch Payroll.
Single Touch Payroll myths
It’s clear that there’s a lot of questions around STP, given how large the change will be for many small business employers. Luckily we’re here to help you out. Let’s start by debunking some of the top myths around Single Touch Payroll that leave many scratching their heads.
Myth 1: I can ignore STP as it only applies to big businesses
Let’s tackle this myth head-on. STP applies to all Australian businesses who have employees. In February this year, new government legislation was passed which means Australian businesses with 1-19 employees now also need to become STP compliant starting from 30 September 2019.
Last year STP compliance was only mandated for businesses with 20+ employees. Now since the new legislation was passed, any business that runs payroll, processes superannuation or PAYE taxes is impacted by this legislative change.
What does this mean for small businesses? It means that if you’re not already using an online payroll system which is STP compliant, you’ll need to move by 30 September 2019. The ATO requires all businesses to lodge their pay runs electronically using STP compliant software, like QuickBooks Online whose payroll is powered by KeyPay.
With an STP compliant online solution, it means you can automatically send payroll information with every pay run. There’s actually a lot of benefits for STP, such as fast and accurate processing, no more manual data entries and tax time will be easier with less paperwork.
So we can put this myth to bed – STP is not just for big businesses. If you’re a small business with employees, including sole traders who draw a wage, you’ll also need to become STP compliant.
Myth 2: It will cost a lot of money to become STP compliant
Even though setting up STP does require some new steps in your business, it’s not going to cost the earth. In fact, many of the small business owners we’ve spoken to have actually been surprised at how affordable it can be. STP compliant accounting solutions, such as QuickBooks Online, start from just $15 per month. QuickBooks has lots of free tutorials to be STP compliant, and a best-in-class customer success team for further help.
So what costs are involved in Single Touch Payroll? Do I have to pay extra for STP with my accounting solution? Nope! STP reporting is included in all QuickBooks Online plans and there are no additional costs other than to have a compliant online payroll system. It’s as simple as that.
Alongside QuickBooks Online’s STP compliant payroll solution, powered by KeyPay, it also has tools which can help in other areas of your business such as expense tracking, invoices and receipt capture.
Remember that if you don’t have a compliant payroll solution, you will need time to get set up and factor in the monthly costs. If you have been working off a paper-based payroll system, then now is a great time to move your payroll online. Sign up for QuickBooks Online today.
Myth 3: I need to be compliant by 30 September or I’ll get in trouble with the ATO
Well, this myth is only partly true – yes the ATO has issued this date, and we encourage business owners to start reporting sooner rather than later, but it’s not meant to be about getting a slap on the wrist. It’s actually about getting all small businesses processing their payroll online and into the swing of things.
If you’re a small business with 1-19 employees, you actually need to start reporting between 1 July and 30 Sept this year. Should you make a mistake there are no penalties in the first year, so no need to panic.
While you should start getting ready as soon as possible, the ATO has provided a grace period. This still means you need to get set-up and it’s important to start looking at your options now, however if you are struggling to get STP organised, don’t be worried about getting in trouble. You may not get it right the first time and the ATO understands that. QuickBooks has an excellent customer support centre which you can call anytime should you need any help with STP.
Lots of business owners are already processing their payroll on the cloud, in fact there are already over 100,000 employers who are STP compliant. Take the time to prepare and get ready, because it really isn’t too difficult and might actually save you and your business time.
Find out more at our new Single Touch Payroll content hub and stay updated as we debunk more STP myths.