Single Touch Payroll News and Updates

BALLARAT, Australia - March 14, 2019 - PRLog -- For financial year 2019-20, the ATO will provide an exemption for closely held employees. STP reporting for these payees will start on 1 July 2020 and it is best to get a head start and consult with an accountant now.

A closely held employee is one who is a non-arm's length employee and directly related to the entity from which they receive payments, including family members of a family business, directors of a company and shareholders or beneficiaries. Generally, the process of paying themselves is not a traditional payroll process. They may use loan accounts or take a drawing when the business has available cash. That is why the ATO found a way to support STP or real time reporting for closely held employees.

Directors would often finalise their salary and wages only at the end of the year when they see their accountants. Because of this, the ATO will move to quarterly reporting obligations and align the STP approach to the closely held lodgment concession for the PAYG withholding payment summary annual report. The agency recognises that some businesses don't have regular pay days so it will be a once a quarter report with the activity statement.

The ATO is also said to adopt a reasonable and flexible approach in the transition to STP of employers with 19 or less employees. They will be allowed to start reporting between 1 July and 30 September 2019 even though the official start date remains the same. This will afford employers more time to consult their accountants and make the transition. Any small business who requests for additional time to start real-time digital reporting will be given a deferral, except for those who experience difficulties or are in areas with no or intermittent internet connection.

Mistakes, missed or late reports for the first year won't be penalised as the ATO understands that plenty of small employers currently don't use commercial payroll software. They are not required to buy such software to report under STP. There will be concessions to micro businesses with one to four employees as they make up 60% of about 750,000 small business employers. They will be allowed to rely on a registered tax or BAS agent to report quarterly for the first two years, instead of each payroll run.

As you look for different ways to grow and improve your business, seeking professional advice from a business consultant could prove to be an important and helpful decision.

You can click here (https://www.skyaccountants.com.au/contact/) to speak to business experts. We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.  Our goal is to help you grow your business, find ways to invest more and increase your productivity.