If you own a small business, then it’s time to do a headcount of your staff. Why? To determine whether your business will need to use Single Touch Payroll systems from 1st July 2018.
In December of last year, the Federal Government stated that Single Touch Payroll would be compulsory for all businesses with 20 or more employees from 1st July 2018.
This change will likely become compulsory for all businesses, regardless of how many staff they have, from 1st July 2019.
Despite this looming deadline being only three months away, a recent Accountants Daily poll shows that most employers are not ready for Single Touch Payroll! In fact, only 25% of accountants’ clients are ready, up only slightly from 10% in October 2017.
So, what does all this mean? Does it apply to your business? And what do you need to do about it? Let’s find out!
What is Single Touch Payroll?
Single Touch Payroll is an electronic method used for reporting employee payroll information to the Australian Taxation Office (ATO) at the same time you pay your employees. Thus, aligning your payroll obligations to your reporting process.
This includes reporting of salaries, wages, PAYG withholding and superannuation information.
As a result, completion of payment summaries at the end of each financial year will be no more – one less thing to do for the ATO!
When do business owners need to start using Single Touch Payroll?
The ATO has warned business owners that they must be ready to lodge employees’ pay and superannuation information through the new payroll systems from 1st July 2018 – no excuses.
Although reporting to the ATO using Single Touch Payroll is not mandatory until 1st July 2018, the ATO is encouraging businesses to prepare and even start, from as early as April 2018.
So, if you are an employer with twenty or more employees, you need to get onto Single Touch Payroll as soon as possible.
Can smaller business owners start using Single Touch Payroll too?
While businesses with 19 or fewer employees have another 12 months to prepare their systems, smaller businesses may voluntarily start using Single Touch Payroll systems ahead of time.
If you are someone who likes to be well prepared, then this would be a wise move for you.
How do businesses prepare for Single Touch Payroll?
Now you know when you need to start preparing, but how do you prepare?
We’ve prepared a brief guide for you:
Count your staff
We may be stating the obvious here, but the first step is to conduct a headcount of your employees on 1st April 2018.
If you have twenty or more employees as of this date, then you need to get moving.
Talk to your Bookkeeper or Virtual CFO
To be ready for 1st July 2018, you will also need to update your current payroll solution to a version that is Single Touch Payroll enabled.
Your Bookkeeper or Virtual CFO will be able to help you with this.
Connect with ATO
The ATO is working closely with payroll solutions and service providers.
By connecting with the ATO on social media, or subscribing to updates on the matter, you can ensure you’re up to date with Single Touch Payroll at all times.
Review your business processes
Prior to commencing Single Touch Payroll, it’s important to review any related business processes.
Processes such as how you’re calculating employees’ superannuation entitlements, how you store employee information etc. – Again, your Bookkeeper or Virtual CFO will be able to help you with this.
The ATO have a ‘Get Ready Checklist’ to help.
At proCFO, we can help you gain an understanding of, plan and prepare for Single Touch Payroll. Contact us and get ready today.