Single touch payroll, STP however you want to refer to it, it’s here and your employer must be compliant. Since July 2018 businesses with 20 or more employees had to make the switch over to STP with smaller businesses following in 2019, but why? Why would the government insist on making companies use STP software to report information about tax and superannuation of their employees? The reasons are quite simple and they make a lot of sense when you think about it. Using STP software centralises and streamlines the collection and sharing of information which benefits employers, employees and the Australian Tax Office. Continue reading to find out why this mutually beneficial switch to single touch payroll was made and how it impacts you.
Centralised Information
When it comes to accessing information the quicker you can get your hands on it the better. Your information will need to be obtained by you, your employer and the ATO so why not have it stored in a place that everyone can get to it easily. You can review and assess your details at any time by logging onto your MyGov account which makes new business ventures and switching jobs a lot easier. No more chasing people for payment summaries or personal details when you have it all available at the click of a button.
switching jobs a lot easier. No more chasing people for payment summaries or personal details when you have it all available at the click of a button.
Streamlined Reporting
Holding data about each employee was necessary before STP was introduced. Mass amounts of information would need to be safely stored in order to create reports for the ATO monthly, quarterly and annually. The risk of holding all this personal intelligence came with its risks. It also left room for error when it came to report writing. What information should be included? What if last year’s figures were by mistake? Luckily, the introduction of single touch payroll solved all these problems. ATO complaint reports are created and sent by STP software which is music to all party’s ears.
Minimised Risk
Whether it’s a slip of the hand or a math error, it’s inevitable at some point that a mistake would be made when manually entering data about payroll. We’re all human, it happens. The best way to avoid this is to use STP software. A mistake with wages, tax or superannuation payments can be devastating for a staff member so minimising risk will give everyone peace of mind.
The End Of Payment Summaries
Do you all remember payment summaries? A document that you’d receive at the end of every financial year stating how much you’d earned and how much tax you’d paid, a yearly account of your finances. What would you do if you wanted to access this earlier? Say you wanted to start a new job or turn a genius idea into a brand new business venture? You’d have to ask your employer for it. Luckily now you can access this information as you please and you don’t have to ask anyone to retrieve it for you. As mentioned earlier, your MyGov portal is the key to all the knowledge you could ever need when it comes to your salary, tax and super.
Summary
Now you know the impact of single touch payroll you can surely understand why it has been introduced. You have access to all your information at the touch of a button, the ATO will be regularly updated which means there will be no nasty surprises and these are just some of the benefits. Not to mention the peace of mind.
