What does Single Touch Payroll mean for your practice?

On 1 July 2018, Single Touch Payroll (STP) will become mandatory for businesses with 20 employees or more – changing the way over 100,000 employers report salary and wage payments to the ATO.

Are Australian businesses prepared for STP?

An Accountants Daily poll of over 600 Australian practices reveals 89 percent believe their clients aren’t ready for STP. It’s therefore likely that you or your colleagues will face many questions from panicked clients leading up to and after 1 July.

Another issue that may arise for accounting practices is that STP reporting requirements for employers may delay many clients from being able to have their tax returns completed.

Be the STP expert

Make sure you and your colleagues are up to speed with STP to answer all your clients’ questions.

For those clients unsure if STP applies to them, it’s important to let them know that they need to perform a headcount of the employees who were on their payroll on 1 April 2018. If they have 20 or more employees on that date, they must report to the ATO through STP from 1 July 2018.

To help your clients prepare, the ATO provides a few good resources, that can be found here.

How will STP benefit your clients?

If your clients are resistant to the idea of STP, it’s a good idea to highlight how it will benefit them. This includes:

  • Streamlined and automated reporting for PAYG withholding. Your clients will be able to remit PAYG with each payroll event.
  • Reduced admin by prefilling of W1 and W2 on the Business Activity Statement.
  • End of year will become smoother as they’ll no longer have to process payment summaries, part-year payment summaries or submit end of year reporting to the ATO.

It’s also a good idea to check what payroll software your clients are using and find out if their software provider will be ready for STP.