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LAST WEEK, MYOB LAUNCHED a beta trial of its single touch payroll (STP) product, as it gears up for the July 1, 2018 compliance deadline.
Businesses with 20 or more employees need to have transitioned to the ATO’s Single Touch Payroll initiative by July.
Businesses with fewer than 20 employees have until July 1, 2019 to be compliant but for these small business owners and contractors the ATO has a new free app.
STP: Turning wages and super into one electronic payment
Single Touch Payroll eliminates end-of-year superannuation reporting and ensures businesses make regular superannuation payments.
The ATO has also introduced a new app which is a great tool contractors and small business owners can use to keep track of their expenses and deductions, and especially to calculate their tax rates (to avoid getting stuck with a tax debt).
Tighter super regulations
MYOB is one of just five cloud accounting systems to offer single touch payroll products. QuickBooks, which uses Key Pay as its payroll partner, is already STP compliant, while Xero appears to working on a STP-compliant product still.
Single touch payroll has been introduced to help the ATO determine more efficiently if businesses are meeting their superannuation guarantee obligations (and their PAYG withholding obligations, too). It’s not uncommon for businesses to take out loans to meet these financial obligations.
Rather than only making super payments each quarter, businesses will now make their employees’ super contributions during each “pay event” — if you pay your staff each week, then you’ll pay their super weekly, too; if staff are paid fortnightly, their super will be paid each fortnight as well, etcetera, etcetera.
Businesses need to ensure accuracy
In essence, single touch payroll is supposed to streamline how businesses manage wages and superannuation into one electronic process. And because the ATO will receive this data in real time, the tax office can contact businesses and help them work through any payroll errors as they occur.
The Australian Payroll Association estimates that the average error rate for ASX100 companies is 0.5 percent, or around $3.95 million payroll errors annually. STP is designed to address and correct those errors.
For businesses already using one of the major cloud accounting programs (Xero, QuickBooks, MYOB), not much will change, except that you and your bookkeeper will need to ensure your data and categorisation in your accounting program is correct.
Make sure your payroll is set up correctly
If you have accounting software, but you don’t use it to process your pays, you will soon be legally required to do so. We’ve recently beefed up our MYOB AccountRight Payroll Course package to include more advanced and complex areas of payroll. See the list of topics included. We also provide payroll training courses in Xero and QuickBooks. You’ll learn how to set up your payroll accurately, process pays and superannuation, and much more.
If you’re an existing EzyLearn student, who has Lifetime course access, or is within your 12-month access period, you can access content updates to the course you enrolled in totally free of charge. It’s all part of our updates and additions policy.
Have your payroll set up professionally
If you’re struggling to keep up with your bookkeeping, because you lack the knowledge and the time, it’s a sound investment to hire a professional. A contract bookkeeper, registered BAS agent or finance manager will get your bookkeeping under control. And if you retain them on a regular basis, you can avoid the costly need for rescue bookkeeping along with any penalties.
If your business is in need of rescue bookkeeping, we have bookkeepers, BAS agents and accountants located across Australia, available to help businesses in need of rescue bookkeeping work. Visit our online directory of local bookkeepers and bookkeepers who work ‘in the cloud’ at National Bookkeeping for more information. You can also view the different bookkeepers’ rates or request a quote.
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