The Single Touch Payroll (STP) system is the new means of reporting tax and superannuation information for your business to the Australian Taxation Office. The STP system was introduced gradually over the past few years, beginning with larger businesses and shifting over to smaller businesses as of July 1st of 2019. If you are a business owner in Australia, then you should already be in compliance with the STP.
However, if you have not yet looked into the STP and what it means for your business, there is still time to get on board. Some business owners might need some motivation or explanation as to why this new system is beneficial. So, if you have ever found yourself asking why this shift to the single touch payroll system has been implemented, then look no further.
Let’s look at six of the specific benefits that you can expect from using single touch payroll.
Improve accuracy
Single touch payroll reduces the chances of making serious mistakes in your payroll information. With the new STP system, you can pre-fill your business activity statements with all the required information to avoid the need for copying this from an original source. This has led to many errors and omissions that wasted time in the past.
Improve efficiency
Many features in the single touch payroll system are designed to streamline the payroll reporting process and save you time. For example, businesses are no longer required to submit extensive end of year reports for the Australian Taxation Office.
If you are worried that switching to the new system will be time-consuming, then fear not. Most payroll software packages are fully compatible with the new reporting standards. Keeping this software up to date will allow you to comply with the STP with ease.
Access new employee information
Hiring new employees and getting them into your systems can be a time-consuming process. However, with the single touch payroll system, you can easily access the tax file number and superannuation information of your new employees from the myGov website.
Make Your Processes Digital
Most government operations in Australia are shifting towards a digital format. The STP is one of many processes that are being streamlined and refined in the process. This general wave of digitalization will rapidly become the new norm for doing business in Australia, too. Switching your systems to be in full compliance with the STP will allow your business to be on the right side of this trend.
Affordable software
Thanks to regulations issued by the ATO, all software that is used for complying with the STP system must be affordable. This means that if you have been hesitant to make the switch because you thought it might set your business back, do not worry. With this reassurance, you can try out numerous payroll software packages to find the right one to meet your business’s needs.
Provide the government with better data
One of the main goals of the single touch payroll system is to provide the Australian Taxation Office with up to date information about the current business climate. With this more accurate and reliable data, the ATO can better inform policymakers and adjust the governance landscape accordingly. This makes it easier to do business in the country and to make sure that policy is responsive to the needs of all Australians.
Start reporting with Single Touch Payroll
These are some of the many benefits that will flow from the single touch payroll system. Make sure that your payroll systems are configured to report in compliance with the STP to ensure that your business does not experience any grief or hindrances in the future.