Single Touch Payroll (‘STP’) for small and micro employers

Legislation has recently passed both houses of Parliament ensuring that Single Touch Payroll (‘STP’) reporting will be extended to employers with less than 20 employees from 1 July 2019.

STP reporting for employers with 20 or more employees commenced on 1 July 2018.

This means that from 1 July 2019 all employers, no matter their size, will generally be required to comply with the STP reporting obligations.

The ATO says it will be writing to small employers who have 19 or less employees and already use payroll software, to tell them about STP.

The ATO intends to remind these small businesses that if their payroll software offers STP, they can update their software and start reporting now.

For micro employers (i.e., those with one to four employees) who do not currently have payroll software, a range of simple, low cost solutions are expected to be available from early 2019.

It is expected that these solutions may include mobile apps, simple reporting solutions and portals.

An alphabetical list of the companies intending to offer these solutions has been published on the ATO website.

The Commissioner of Taxation, Chris Jordan, recently made a personal guarantee that the ATO’s approach to STP will be “flexible, reasonable and pragmatic”.

In particular, despite the 1 July 2019 start date for small employers, the Commissioner has stated that these taxpayers can start STP reporting any time from 1 July 2019 to 30 September 2019, effectively granting a three-month reprieve.

The ATO has also indicated that there will be no penalties for mistakes, missed or late reports for the first year, and that exemptions will be provided from STP reporting for employers experiencing hardship, or in areas with intermittent or no internet connection.

Ref: Treasury Laws Amendment (2018 Measures No.4) Bill 2018 and ATO website, ‘Single Touch Payroll for all employers’, ‘Low-cost Single Touch Payroll solutions’ and the ‘Statement from Commissioner Chris Jordan about transition to Single Touch Payroll for small employers’