On 1 July 2018, STP reporting was introduced for substantial employers (20 or more employees as at 1 April 2018). Under STP reporting, an employer reports information on their salaries and wages, PAYG withholding and superannuation to the ATO in line with their payroll cycle.
Amending legislation — contained in the Treasury Laws Amendment (2004 Measures No. 4) Bill 2018 was passed by the Parliament on 12 February 2019 (at the time of writing, the Bill awaits Royal Assent) — extends the requirement to report tax and superannuation information through STP to the ATO at the time of the payroll to all employers from 1 July 2019.
STP reporting extended to all employers from 1 July 2019
There is no need to conduct a headcount on 1 April this year because, from 1 July 2019, all employers will be subject to STP reporting.
This is the most significant change to reporting systems for businesses since the introduction of the GST on 1 July 2000. Currently more than 60,000 employers are now reporting through STP. The ATO expects that once STP reporting is extended to small employers, approximately a further 749,000 employers will be subject to STP reporting.
These employers will need to undertake a review of their payroll systems because STP reports are submitted directly to the ATO at the time of the payroll using STP-enabled compliant software. Some employers will easily transition to STP reporting because they already use electronic payroll solutions which will only require the built-in STP-reporting function to be enabled or the software upgraded. However, other ‘digitally-disengaged’ employers who don’t currently use an electronic payroll solution will find the transition more difficult, particularly those who employ only a few people and maintain very basic, and manual, business records and systems.
Over the past 18 months, the ATO has been working with a group of stakeholders — including tax agents and practitioners, BAS agents and bookkeepers, small business owners, and representatives from the superannuation industry and digital service providers (DSPs, otherwise known as software developers). Recognising early that one of the biggest challenges was going to be extending STP to micro employers (those with four or fewer employees), the focus of this working group was to formulate and design alternative reporting solutions and options for micro employers.
The special nature of closely held employers was also considered, as they routinely do not have a regular payroll cycle and often determine or finalise their payroll for closely held employees after the end of the income year, often as part of the annual compliance process. Special reporting rules (with conditions) have been designed for this specific group of employers.
What will the webinar cover?
During the webinar, we will discuss:
- the ATO’s administrative approach to the implementation of STP reporting for all small employers (19 or fewer employees);
- alternative reporting solutions and options for micro employers (four or fewer employees); and
- special rules for closely held employers.
We will also dispel some of the common myths regarding STP, such as “The ATO requires all employers to purchase expensive payroll software to report through STP”.
Our expert presenters, Robyn Jacobson and Michael Karavas, bring their knowledge in the area to ensure that you understand what is involved to implement STP, now that it has been extended to all employers.
Robyn Jacobson (FCA FCPA CTA Registered Tax Agent) is a Senior Tax Trainer with TaxBanter. Robyn regularly consults with The Treasury, the ATO and the professional bodies on technical issues. She has been involved in the ATO’s STP consultation for more than three years, working with, and assisting, the ATO with the design of the STP legislation, alternative reporting solutions for micro employers, and guidance products issued by the ATO. Robyn co-presented an STP webinar in March 2018 with John Shepherd, Assistant Commissioner at the ATO and Program Lead of STP.
Michael Karavas is a Director at the ATO and Design Lead of STP. Michael has over 25 years experience in tax administration with most of the last 20 years focusing on the implementation of new Government initiatives. For two years, Michael was seconded to The Treasury where he was the Policy Lead on the development of STP. Michael also chairs the STP Design Working Group which works collaboratively with a broad range of industry stakeholders on STP design issues.
Who is the webinar suitable for?
Our webinar is suitable for all tax agents, BAS agents, bookkeepers, payroll officers, and individuals who fulfil a payroll function within a business.
A slidepack will be available on the day.