For years, payroll has been languishing in the wilderness, but with the introduction of Single Touch Payroll (STP), it will finally now 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 essential whether you are an employee or an employer. It is just as crucial to business as accounting, but it has the added responsibility of being integral for employees.
Where did real-time reporting start?
The Single Touch Payroll journey started for me over twenty years ago. Even then, it was obvious that real-time reporting would be a necessity, not a luxury. The concern regarding privacy (big brother syndrome) is understandable but no more or less than the concern presented when the Australia Card was first proposed in 1985. 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.
The numerous benefits of Single Touch Payroll.
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 can see more of their tax and super information online through myGov. These benefits provide far greater transparency for the employee, negating individual privacy concerns. STP helps ensure that employers are meeting their 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. However, nothing within the existing STP legislative framework warrants these marketing tactics, as the ATO is 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 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 moved from the backwaters of accounting, and I know that with the introduction of STP, payroll will be more critical to businesses than ever before.
The information provided in this post is general knowledge and serves as commentary. Your situation is not considered, and the contents should not be deemed legal, financial, or professional advice. You should evaluate whether this information meets your needs and, if necessary, seek independent professional guidance. The information is accurate only at the time of publication. While every effort has been made to verify the accuracy of the details on this webpage, e-PayDay Pty Ltd disclaims, to the extent permitted by law, all liability for the content presented or any loss or damage incurred by any individual directly or indirectly from relying on this information.
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