Single Touch Payroll was first introduced to Australia in 2018; initially, it was only compulsory for bigger companies, but with time, it has become compulsory for every company. The Australian Tax Office rolled it out in phases, ensuring that each phase’s transition to STP was smooth. Now, as of the 1st of July 2022, all companies, without exception, are expected to adopt an STP system. Now, many are left wondering why was Single Touch Payroll introduced in Australia. If you haven’t already noticed the benefits of STP, let’s discuss it further to understand why we need it.
How Does STP Help My Company?
For companies of 20 employees or more, Single Touch Payroll has been a part of the day-to-day processes since 2018, when the first phase was rolled out. The system simplifies payroll to ensure that a variety of information is sent directly to the Australian Tax Office as payroll is completed each week or month. The information included in STP submissions includes wages and salaries, tax, PAYG, superannuation, super liability, and withholding. The benefit is that this is done automatically as payroll is processed. It helps companies by cutting down on tax administration and minimises mistakes. Overall, Single Touch Payroll streamlines reporting, saving companies time and money.
How Does STP Help the Australian Tax Office?
The Australian Tax Office is aware of the stress tax season exerts on businesses, and as a result, they found a way to assist employers and their employees in this matter. Using this centralised system, all wage and salary information is sent to the ATO immediately as payroll is complete. Simpler processes save everyone time and money. As a result, each company and individual’s payroll information is always up to date, and tax reporting is simplified, which also benefits the ATO.
Single Touch Payroll ensures companies and their employees are tax compliant. Companies can no longer get away with not paying superannuation or Pay-As-You-Go instalments to employees. In addition, businesses can no longer avoid paying tax by paying employees cash or not declaring income. Ultimately fewer companies and individuals can skirt or outright break the law. And for those who comply, there is one less thing to worry about during tax season. Single Touch Payroll was introduced in Australia to minimise tax fraud and assist taxpayers in their yearly submissions.
What to Look for in STP Enabled Software
Many accounting software packages offer STP functionality, but what is right for your business, and how do you find it? Firstly, any STP software you use must be ATO compliant to ensure it syncs with their system correctly. Next, you want to ensure that the software offers the functions you need for your company. To begin with, you need software which is easy to use and implement; from there, you need to ensure that the software is secure. Lastly, you need to have access to support to assist you if you get stuck.
Tencia might be just what you’re looking for if you’re on the market for STP-enabled software. Along with a wide range of other business functions, you can be assured that Tencia will meet your Single Touch Payroll needs. To find out more, get in touch today to schedule a demonstration.