With the introduction of Single Touch Payroll (STP) for ALL employers, the importance of tax planning each quarter for all Directors will be imperative.
Key Tax Planning Issues to discuss with us at WLM for 2018-2019:
1. Opt in for Single Touch Payroll
2. Utilising the Small Business concessions to spend up to $30,000 on plant and equipment and get an immediate tax deduction (legislation still to pass)
3. Get up to date with Super Guarantee Obligations
4. Annual Payment Summaries or STP finalisation
5. Management Reports and Cashflow management
6. Are you on interest only loans for your home and investment property?
7. Are you earning less than the taxable income threshold and receiving franking credits?
The ATO recently made Single Touch Payroll (or STP) compulsory for all employers. No idea what Single Touch Payroll is, or how it will affect you as a small business owner? We’ve got you covered with all the top questions on STP answered.
Introduction to STP
What is Single Touch Payroll?
Single Touch Payroll, also called STP or one touch payroll, is an ATO initiative that requires employers to report salaries and wages, PAYG withholding and superannuation to the ATO each time they pay their employees.
How has the legislation recently changed?
Until today, legislation made it compulsory for businesses with 20 or more employees to digitally report payroll details to the ATO. However, following today’s amendment, it is now mandatory for all employers in Australia to adopt a compliant payroll solution, which are often software-based, from 1 July this year.
What does it mean for me as an employer?
Digital connectivity is becoming a necessary part of running a business in Australia. Instead of typically reporting payment once at the end of a financial year, employers will now be required to send information to the ATO with every pay run.
Can I start filing STP before it is mandatory for me?
Yes you can! STP is available on all Xero plans that include payroll. Just go to the pay runs screen and click the banner to get started. Contact us at WLM for assistance or for a full rundown, check out the Xero Central article on setting up STP.
What information is sent with STP?
Payment, tax and super information will be reported to the ATO each time you pay your staff. Xero works out what payroll information needs to be filed, and sends it through to the ATO for you. For more details on what is reported, take a look at the ATO’s page on what you need to report.
Do I still need to submit a BAS?
Yes, businesses still need to submit a BAS. If you’ve set up the W1 and W2 values in Xero Payroll, they will continue to show up in BAS/ IAS as usual.