Gemma Heaney is director of HBG Tax & Accounting. Gemma has an extensive knowledge of many areas in business and is perfectly placed to provide you with solutions to minimise your tax obligations and maximise your wealth building strategies.
Gemma has over 15 years experience in tax and accounting and began her practice in 2006 as a Graduate Accountant. Gemma has a a Bachelor of Commerce (Major in Accounting and Minor in Business Law) from Murdoch University Western Australia. Plus she is SMSF Licensed and is a Registered Public Practioner with CPA Australia.
Gemma is a passionate community leader with a strongly belief in supporting local small to medium businesses. She is enthusiastic about encouraging them to grow and aims provide a supportive culture that empowers and unites people.
Demystifying Single Touch Payroll
What do small business owners need to know about single touch payroll. The main thing that most businesses need to be aware of that it is now going to be mandatory for all employers, from the first of July 2019. It has actually been in for larger employers to more than 20 in as the first of July last year, but this is this year, it’s going to be mandatory for all employers.
The biggest change will be for small businesses that don’t have an electronic payroll system. There will be concessions in place for micro employers (1 – 4 employees).
Demystifying Single Touch Payroll
What should we be doing as a small business to prepare us? It is going to depend for a lot of business owners on what they’re already doing now. Most businesses that have a relatively normal number of employees, 8 -15 employees, they are likely to already have an electronic payroll system.
If you already have an electric payroll system eg MYOB Accountright, Xero, QuickBooks Online, MYBO Essentials, Pronto etc all of the more well known online accounting software; all of those will already be single taxpayer already because of the larger employers that can in last year. There should already be a bottom in their system to sort of just click, opt-in. You will just need to go through a registration process, let the ATO know a software ID, and you’re pretty much ready to go and you can keep paying stuff keep paying staff as normal. It’s not a complicated for those ones as it may seem.
It’s the businesses that are still on a desktop version of your accounting software that have been reluctant to start having the monthly subscriptions or the yearly fees; and haven’t upgraded to online in the past.
Unfortunately, the ATO is now forcing these businesses to upgrade and become Standard Business Reporting compliant (SBR). Or the other option is to swap to a free or low cost payroll system as per the ATO’s list.
The biggest change will be for businesses that are still doing manual cash books, excel spreadsheets those types of things, which you would think there’s not many that surprisingly, there are.
I find it hard that any business can run without having some kind of electronic system and having financial reporting that helps them make informed decisions, day-to-day, although it is kind of a push from the ATO it’s probably a really good time to sit down and talk to someone about what is going to be the best system for them. It doesn’t need to be expensive there is going be low cost options. It may be time to think about getting on a computer and start doing this now, instead of in a cash book.
For these businesses it probably means that they need to look at their whole business as well, which is probably not a bad thing to do. In episode #007 we talked to Charlotte Brown about planning.
If you are still doing your pay slips in Word or Excel, did you know that you are required to give your staff their pay slip every pay circle? Fairwork states that an employee must be given their pay slip within 1 day of their pay day, even when they are on leave. To get on a system have their employees email addresses in there and just be clicking on a button now each week will make it really easy. It makes sense, it’s just kind of forcing all businesses to come with the times.
What is Single Touch Payroll
Single touch payroll is an initiative by the ATO to have employers to report electronically through the Standard Business Reporting system, their pay roll information each pay cycle. You don’t have to change your pay cycle. If your pay cycle is weekly fortnightly or monthly however you’ve been paying it will still be the same. Historically, the ATO have only ever got information about which specific employees tax file numbers etc, that you have been paying what their wages, taxes, what they’re super is until the end of the year when you’ve launched your groups certificates, and your pay as you go summary (PAYG) statement. Now, every time you click that pay now button and you produce your pay slips for your staff, you are going to click file and it’s going to send that information directly to the ATO.
Data Matching To Better Control Super Payments
What you will find now is that the ATO will be data matching, they are going to have a really good picture of what’s going on there. The wages and super information is going to be reported every pay cycle and very quickly, they’re going to be able to see that ABN (business) didn’t pay super to that employee and then send them a letter.
No More Group Certificates or PAYG Summaries
Single touch payroll is going to do away with the need for doing Group Certificates and PAYG Summaries at the end of the year. Employers need to encourage their staff to get a MYGov Account. The MyGov account will show all the year to date payments once you go to the SBR systems. The employee will be able to see exactly what they have been paid and when including if their super has been paid for them. If they employee has not being paid, their super, they should be able to say to their employer pretty quickly, what’s going on?
SBR will streamline a lot of businesses and make it easier for everyone in the long run.
Micro Employers Will Be Able to Use A BAS Agent for 2 years
Micro employer – business owners with one to four employees, and it doesn’t include the directors will be given a concession; not a concession from reporting. The concession from not having to report every pay run. Micro employers will be able to appoint a BAS or a tax agent to lodge quarterly for them for the first two years.
Tips to Going Single Touch Payroll
- Talk to your BAS Agent or Accountant.
- Do your research they are a lot of software systems available.
- Look at the low-cost options listed on the ATO website. This list is probably a little bit overwhelming that, maybe just pick one or two and start looking into those and see how they’re going to be a good fit for you.
For More Information on Single Touch Payroll
Listen to episode 011 of the Small Business Talk Podcast to hear Gemma Heaney’s full insights on single touch payroll so that you are ready for July 1st, 2019.
Contact Gemma Heaney at HBG Tax & Accounting or phone on 08 9594 1963
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