Covid-19 - maybe a case for finally embracing STP?
If you haven’t already done so, now is the perfect time to implement Single Touch Payroll (STP). Let’s talk about why.
By ATB Partners
Reap the benefits of STP
One of the initiatives implemented by the ATO in the past few years, Single Touch Payroll (STP) reporting, was introduced with an important objective: faster and more accurate reporting of tax and superannuation obligations.
But right now, it’s also proving to be exceptionally valuable as a streamlined communication tool for businesses accessing government assistance.
Most SMEs and micro businesses aim to do the right thing when it comes to tax and super – but the Australian tax regime and the superannuation scheme can be complex and in small companies with limited time and resources costly mistakes can take time to identify and undo.
The benefit of STP is that once it’s set up, STP reports employees’ salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and superannuation information to the ATO at the end of every pay cycle. Accounting software such as Xero have in-built mechanisms that match ATO reporting requirements that truly make this as simple as ‘pushing a button.’
The benefit for business is that it minimises the risk of error and reduces the amount of the end of Financial Year paperwork. The benefit for your employees is they can see all of their entitlements and information online.
STP has been mandated by the ATO
Despite the fact that STP has been mandated by tax law and all Australian businesses should be using it, many small small businesses have yet to embrace it. Either they don’t understand it, or see the benefits or they fear it’s going to be cumbersome and expensive to set up, or they just haven’t had the time to consider it.
If your business hasn’t set up STP now’s the perfect time. Not just because you’re going to have to do it at some point, but because right now, it has another important advantage.
In helping several businesses to access JobKeeper and other government assistance available right now, those businesses with STP have had a much smoother, quicker application process. This has made signing off on funds easier at the ATO side too and in many cases, funds are made available to businesses much sooner than they are through manual processes.
Some of this funding, JobKeeper for example, will require ongoing reporting to the ATO over the next six months and STP will make that easier.
We’ve helped many Australian businesses set up STP, if we can help you,, please give us a call.
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