Updated: Oct 11, 2021
For years payroll has been languishing in the wilderness, but with the introduction of Single Touch Payroll (STP), it will now finally be front and centre.
Single Touch Payroll is moving payroll functionality from the Accounting backwaters and will change the way we look at payroll forever.
Payroll is equally important whether you are an employee or an employer. It is just as important to business as Accounting but has the added responsibility of being integral to employees.
Where did real-time reporting start?
The Single Touch Payroll journey started for me over 20 years ago. It was obvious even then that real-time reporting was going to be a necessity, not a luxury. The concern regarding privacy (big brother syndrome) is understandable but no more or less than the concern that was presented when the Australia Card was first proposed in 1985. As we know, the Australia Card never came to fruition (abandoned in 1987), but in principle, it was replaced by the Tax File Number (TFN).
With real-time reporting, it creates a level playing field for all employers ensuring that businesses can have far greater confidence that other employers are meeting their PAYG withholding tax and super obligations.
Single Touch Payroll streamlines business reporting obligations and makes it easier for employers to report to the ATO. When employers report to the ATO through Single Touch Payroll, employees will be able to see more of their tax and super information online through myGov. These benefits provide far greater transparency for the employee, therefore, negating individual privacy concerns. STP helps ensure that employers are meeting the obligations to their employees.
Some organisations will use "scare tactics" to help sell their consultancy services in the lead up to the introduction of STP. There is nothing within the existing STP legislative framework that warrants the use of these marketing tactics as the ATO are taking a soft touch approach to compliance during the Single Touch Payroll introduction period.
The biggest concern regarding payroll compliance within your business is Fair Work. Employers can now be held responsible for underpayments and any other "bad payroll behaviour". They can be personally penalised with far reaching consequences for any future business endeavours.
Complying with workplace laws is “not optional” and starts with properly trained payroll personnel closely followed by well-crafted payroll software.
Payroll has now moved from Accounting to HR, and I believe with STP it will be more important to businesses than ever before.