Parliament has now passed legislation to extend Single Touch Payroll (STP) reporting to include all employers from 1 July 2019. STP is pay day reporting by employers to the ATO as it happens, this reporting having started on 1 July 2018 for large employers (20 or more employees).
The aim of STP is that the ATO have real time reporting on information such as superannuation entitlements. The ATO are moving to digital reporting and this is part of this process.
All employers will have to lodge this information electronically and there is no paper option. Because of this the ATO understands that there will be circumstances where more time is needed to implement STP or lodge reports.
The ATO have advised:
- They will offer micro employers (1 to 4 employees) help to transition to STP and a number of alternative options – such as allowing those who rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each time payroll is run.
- Small employers can start reporting any time from the 1 July start date to 30 September 2019. They will grant deferrals to any small employer who requests additional time to start STP reporting.
- There will be no penalties for mistakes, missed or late reports for the first year.
- They will provide exemptions from STP reporting for employers experiencing hardship, or in areas with intermittent or no internet connection.
Xero does have the functionality of STP and Evolve has been lodging these reports for our clients with over 20 employees. Evolve can assist in guiding you on how to register for STP in your Xero file.
Xero will also offer a low cost (around $10/month) payroll only subscription for micro businesses who currently do not use a computerised accounting system.
If you have any questions surrounding STP or how this works with Xero, please do not hesitate to contact us.