Staying in compliance with your tax and financial reporting requirements is one of the most significant legal obligations imposed on all Australian businesses. It is therefore essential to ensure that your business has all of the available information and tools required to fulfill your legal requirements. Read on to find our tips to help your business maintain tax compliance.
1. Prepare for Single Touch Payroll Reporting
Single touch payroll (STP) is one of the most significant recent developments in tax and financial reporting compliance. To maintain compliance with your reporting obligations you need to develop a firm understanding of STP and how it will modify your traditional payroll processes.
The first phase of STP reporting became mandatory July 1, 2018. However, that phase only affected businesses with 20 or more employees. The second phase will see STP reporting become mandatory for all small businesses. This means that companies with with 19 employees or fewer will need to be in compliance with STP reporting. And this becomes effective on July 1, 2019
Single Touch Payroll Changes Payroll Reporting
STP changes the traditional model of payroll reporting. Until now, small businesses could send all employees’ payroll information to the Australian Taxation Office (ATO) at the end of the year. However, STP utilizes payroll software. Further, it sends this information on a pay-by-pay basis.
Payroll and business management software already compile and record vital information including net pay, PAYG withholding, and superannuation contributions for each employee during every pay cycle. Now, however, STP converts this information into the required format.