The payroll function of every business is about to change. The reason behind the change is new legislation surrounding single touch payroll regulations. The Australian Taxation Office has introduced new legislation which mandates the use of single touch payroll software for all employers. This change probably isn’t news to a lot of businesses, but the benefits of the change may be. There are a number of things you need to know about single touch payroll, both good and bad. If you are a little in the dark about these new changes, use this guide to understand what you should know about single touch payroll.
What does it do?
Aside from being a regulation imposed by the ATO, the changes offer a number of real benefits to the payroll function of your business. STP creates a single view of all employees for all facets of the payroll function. Tracking hours worked, annual leave entitlements, tax requirements and superannuation are all done in real-time at the same interval as your pay runs. It helps to remove unnecessary reporting and steps for your payroll team at the end of the financial year. With real-time updates, there is no need to compile and double handle all of the individual data about your employees. An STP system also allows your employees greater control of their details. By capturing a single view of the employee, you can easily make necessary changes to salary or entitlements in one system as opposed to several.
Who does it benefit?
STP on the surface may seem like it only benefits the business, but employees will benefit from this change as well. For the employer, you gain valuable time back at the end of the financial year, remove double handling of data, and gain a single source of truth when it comes to payroll for your staff. For employees, an STP solution offers real-time access to crucial data such as PAYG statements at tax time. Instead of waiting for your employee to organise, print and post your statement, the ATO now has access to all your relevant data in real-time. That means employees can action their tax returns quicker and don’t need to worry about populating or double handling the data from their statement as the ATO system pre-populates all the necessary information. The STP change will help make the lives of both employees and employers easier when it comes to tracking payroll information.
STP isn’t just about making tax time easier, it has a lot of fringe benefits to offer your business. By centralising all of your payroll data into one system, it helps create a single view which makes tracking and on-boarding much easier. With a single touch system, adding new employees and onboarding them through the plethora of forms and financial data is much easier. Instead of having to track countless paper forms, you can simply allow them to input their information and sync their data with the ATO. This helps lower data entry errors which can result in serious issues for your business. An STP also allows you to track and make changes more easily. Instead of having to change details in a multitude of systems, STP means tracking and updating employees is streamlines in one system. This helps avoid double handling and potential clashes in data integrity.
Single touch payroll systems are a new way to create a dynamic view of an employee for both businesses and the ATO. There are some fundamental advantages to both parties that come with this change. There is also some work to be done implementing this change correctly. Using this guide will help you learn all you need to know and implement the STP changes successfully.