Single touch payroll is causing quite a stir in the Aussie business world. But what is it and why is it important to be across it? We have put together a helpful guide on all things ‘single touch payroll’ so you can be fully versed in what this new tool means for your business.
Single touch payroll in summary
Essentially single touch payroll is the new ATO reporting system for Aussie businesses. The goal of this new system is to achieve:
On time payment to employees
Real-time monitoring and reporting to the ATO
Single touch payroll leaves the way businesses calculate staff payments exactly the same. Change kicks in at the moment your payroll is processed. Once your payroll processing is done, you send all required payroll information directly to the ATO – every time you run your payroll. That means the ATO receives up-to-the-minute reporting on:
Salaries and wages
Salary for return to work payments
Termination of employment
Sound tricky? It doesn’t have to be. Existing payroll systems like Xero and MYOB can have single touch payroll reporting built in, so the whole process can be streamlined and simple.
Who does single touch payroll affect?
Right now, as a small business owner, you can choose whether or not to bring single touch payroll on board in your business. Not so for larger businesses. From 1 July, all businesses with 20 or more employees must use single touch payroll to report to the ATO on all things payroll.
That said, single touch payroll is definitely worth considering. For starters, it goes a long way to free you up from time spent on administration and payroll, so you can spend more time on your business. Other benefits include:
Simpler reporting obligations
Greater visibility of key payroll information
Another factor to consider is that the ATO is looking into rolling single touch payroll out as a reporting requirement of small businesses too. So getting your payroll program single touch payroll ready is a good move. Capify small business loans can help you with the costs associated with the transition to single touch payroll.
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