RA Business Advisors

single-touch payroll

Single Touch Payroll For Everyone!

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Small business STP

It is now official, all businesses no matter how many employees they have will be required to electronically file each pay run with the tax office using Single Touch Payroll (STP) as of July 1. With 40% of the nation’s workers employed by small businesses, this is a big opportunity for cloud-based solutions to overhaul the efficiency of your small business.  

Xero has been the royalty of cloud-based solutions for some time now, with STP being only two clicks away. For the 90,000 businesses yet to embrace any software, this is a great time to start looking.  

What does this mean for micro-businesses?

As of last week, Xero announced a standalone solution for micro-businesses with four or fewer staff. This payroll-only product will process, pay and report information for up to four employees, with an expected price of just $10 a month (what a steal!).  

Did you know RA Business Advisors are long term Partners with Xero? If you want to hear more about what Xero can do for your business, give us a ring on 07 3367 0852 or email your questions through to mail@raaccountants.com.au

Mid-Market to See Xero and Intuit Enter Arena

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Xero and Intuit to enter mid-marketAs the roll-out of Single-Touch Payroll sweeps across Australian businesses, MYOB Premier have decided against adding relevant services to their platform. This has given Xero and Intuit incentive to enter the mid-market, but is it worth your time?

Hang on, what is the mid-market?

The mid-market consists of the 50,000+ businesses in Australia with more than 20 but less than 200 staff. As well as more than $3 million turnover and three or more users of the core business system. This is a market currently dominated by MYOB, but soon to be contested by Xero and Intuit.

Why would I want to use Xero or Intuit anyway?

These platforms have been game changers for small businesses, offering a cloud-based platform which is constantly updating to include support for the future. Technologies such as machine learning, bank feeds, as well as well optimised user interface are huge selling points of Xero. However, to many these options are only available to small businesses with Xero or corporate level businesses with Workday. This is where the mid-market jump for Xero and Intuit comes into play.

Why isn’t the mid-market using these platforms now?

One of the main reasons cloud software hasn’t penetrated the mid-market is because of fear and cost of change. The majority of companies using MYOB do so because they doubt smaller software can perform, and fear the cost of corporate platforms. But this is not the case, as more businesses are realising Xero can match and exceed the performance of MYOB, as well as offering more features at a lower price point.

Single-Touch Payroll: How Is It Going To Change Things For You?

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While the name may suggest some weird form of physical payroll, single-touch payroll (STP) is a new initiative from the ATO which came into effect at the start of this financial year. STP is currently applicable for employers with 20 or more employees. However, STP will also be used for employers with fewer than 20 employees from the start of next financial year.

single-touch payroll

 

What is single-touch payroll?

STP enables employers to report salary or wages, PAYG withholding and super information directly to the ATO at the same time they pay their employees. STP will send a copy of these to the ATO automatically when these are sent to the employee. The system is designed to make reporting easier for employers, as well as addressing the unpaid superannuation crisis.

How do I report through STP?

Reporting is easy as the process of STP is automatic, once your reporting software is STP-enabled. Before lodging your first report, make sure you authorise people to lodge reports on behalf of your business. As well as checking if you are in need of an AUSkey, this identifies you as the representative for your business when using online government services.

There are some payments which cannot be reported through STP, these include:

  • payments that are generally not paid through a payroll process;
  • payments made by payers to recipients that are generally not their employees

Are there any issues that could arise from STP?

As long as you are up-to-date on your super payments there is no need to worry. However, for smaller businesses that don’t pay super on time due to limited cash flow, consider breaking down these payments to be more regular to meet your obligations under STP. If you’ve missed superannuation payments in the past, there is an amnesty period until May 2019 to rectify any past non-compliance without penalty. Grievances can be backdated as far as 1992, so make sure you are on top of your superannuation!

Are there any benefits for employees?

Peace of mind. Through establishing the STP system, the ATO will get a report every time an employee is paid and will be able to instantly verify the superannuation payments are up to date. Employees will also be able to complete Super Choice forms and TFN declaration forms through their myGov account.