What it means for you
As you may have already heard, this year the requirement to utilise single-touch payroll services has been extended to include micro-employers (business with 4 or fewer employees). This has been in place for larger businesses for the last year and has had some teething problems, but it will be in force for all businesses with employees from July 1, 2019. Although micro-businesses get a wash-in period between July 1 – Sept 30, 2019.
For the uninitiated, single-touch payroll is just a nice, all-in-one term used to describe how accounting or bookkeeping software can send your payroll information directly to the ATO with the single key touch (designed to ensure all employees are being paid appropriately – especially their super). For those of you who are terribly worried about the automation apocalypse, the rise of the machines and the less than stellar level of control you have over your own personal data, this can be a terrifying prospect. But for small business owners, this change has the potential to be a huge burden lifted from your already over-worked shoulders. Yes, really.
What will actually change?
If you’re already utilising bookkeeping software like Xero, MYOB or QuickBooks, etc, you have a little less work to do to get things in order. You’ll be able to report your payroll data through your bookkeeping app. Depending on your software solution, you’ll have a slightly different experience with the change, if your software offers an end-to-end service like Xero does, your information will be sent to the ATO directly, no intervention required. You’ll just need to set up the reporting link.
Alternatively, your software might send your data to an integrated third-party that will then send it to the ATO. For you, this will likely mean you have to type in your password one more time and not much more, but it’s important to be aware of the process and know which companies you are giving access to your sensitive information.
Finally, your software may process your information and require you to send it on to a third party. If you end up utilising one of these options make sure you do the second part! It might be worth your while spending a few extra dollars a month to save yourself the pain of getting all your pays, BAS, reporting sorted for the year and then realising you forgot to do this one vital thing.
If your accounting software utilises single-touch payroll, you’ll no longer have to submit your Payment Summary Annual report (PSAR).
And if you’re not using software?
If you have thus far chosen to DIY your bookkeeping without any compiling or bookkeeping software, then this really is the time to review your situation. There are a number of exemptions for certain employers, but they are limited to circumstances like no reliable internet, irregular employment patterns and no digital capability. Aside from this you will need to really consider your reporting options. Where you don’t feel that you need accounting software as such, but will need to fulfil the STP reporting obligations, you can choose low-cost or no cost solutions that the ATO have requested software developers to provide
As the ATO brief was to provide software options for $10 or less, the majority of the products are $10 per month such as Xero Payroll, MYOB Essentials Payroll and ClockOn Payroll. However, there are some free products such as Reckon Single Touch Payroll and a number of others listed on the ATO website.
Anything to watch out for?
Not if you’ve got your finances in order. That having been said, even the most well-intentioned business owner can get bogged down in details and make mistakes. That’s why it’s always helpful to get an outside expert to check where you’re at and make sure you won’t have any hiccups or issues once things become more automated.
If you’d like to chat with someone about transitioning to single-touch payroll or digital bookkeeping, we’d be delighted to help. You can call us on 02 6023 1700 or drop us a note via the form below.
Got a question? Get in touch
If you've got financial or business questions, or you just want to run something by us, we'd be delighted to really talk to you – in person, over the phone - call us on 02 6023 1700 - or you can use the form below and we'll get back to you.