Single Touch Payroll, or STP, has been pivotal in improving the efficiency of the Australian Tax Office while giving businesses the bonus of a fast, simple, and painless way to report payroll. The legislation surrounding Single Touch Payroll is such that its roll-out has been planned in stages, with each year seeing more businesses required to adhere to the mandatory STP requirements. Switching to Single Touch Payroll is important because it makes payroll reporting so much easier. From employers to employees, and for the Australian Tax Office, STP streamlines the entire reporting process. More than its mandatory status, it is the way forward.
STP Is Important for the Australian Tax Office
The easier it is for businesses and individuals to report their taxes and submit their annual tax returns, the better it is for the Australian Tax Office. When a system is simple and easy to use, people are willing to use it and ultimately less daunted by the thought of dealing with their taxes at the end of each financial year. As the Australian population grows, so does its need to ensure that everyone’s tax information is easy to record and obtain as and when it is needed. With a well-functioning, ATO compliant payroll system, people can accurately report and pay their taxes, ensuring the Australian tax system works as it should.
STP Is Important for Employers
For anyone, time wasted is money wasted, which is why annual tax and payroll reporting is stressful. If businesses have a system in place that simplifies and streamlines reporting, it is likely worth the investment needed to implement it. By switching over to Single Touch Payroll, employers can automatically submit all of their employee payroll information as it is filed. STP automatically reports employees’ salaries and wages, super liability information, tax, pay as you go (PAYG) withholding, and superannuation. This way, all payroll information is up to date, annual tax reporting is simplified, and businesses stay tax compliant.
STP Is Important for Employees
For employees, a Single Touch Payroll system ensures that all salary information is up to date and available as it is updated with every pay cycle. This information is viewable on the myGov website, and employees no longer need to wait until the end of the financial year to view this vital information.
Avoid Penalties for Noncompliance
Above the benefits of Single Touch Payroll is the importance of actually deploying it. Starting from the 1st of July 2018, businesses employing 20 or more people were required to adopt and implement the system. From the 1st of July 2019, it became mandatory for smaller companies with 19 or fewer employees to adopt STP. Failing this, the Australian Tax Office will issue penalties for not complying with STP legislation. Late STP lodgement penalties are the same as failure to lodge penalties.
The best Single Touch Payroll software is software that integrates throughout your business. Tencia is Arrow’s answer to business accounting software. It enables businesses to effectively manage everything from creditors and debtors to stock, and most importantly, Single Touch Payroll. Sign up for a product demonstration today to find out more about Tencia.