Single touch payroll (STP) is an initiative by the Australian government which requires all employers to report their employees’ payroll information electronically to the ATO portal for each payroll cycle, whether this be weekly, fortnightly or monthly.
This mandate comes into effect from 1st July 2019 and is likely to impact around 749,000 businesses, considered as having less than 20 employees. STP reports must be submitted online after each pay day with the Standard Business Reporting (SBR). The need for cloud based software has arisen due to the inability of the desktop versions of accounting software to be compliant. This is largely due to the need for desktop versions having to continually be connected to the portal to convey information. The use of cloud-based software, such as XERO for STP reporting, will mean that information will be directly forwarded to the ATO and firms will no longer be required to upload information manually. The impact of STP for businesses already using online software is minimal. However, businesses currently using desktop accounting software for payroll reporting will be required to move to cloud reporting. One of the biggest impediments for the movement to cloud based accounting is that most small businesses and their bookkeepers have become accustomed to using desktop versions of accounting software and are hesitant to make the change to the cloud.
If you need any further information or assistance in choosing the right accounting software for Single Touch Payroll reporting, then please contact BD Welsh & Co.