Updated: Nov 16, 2021
‘Compliance is dead!’ scream the doomsayers in both the accounting and bookkeeping industries…. But what do they really mean? Is compliance dead? And what is it anyway?
If by compliance, you mean the days of a bookkeeper or accountant just doing the data entry to get to a set of useful figures, then yes those days are numbered… but anyone working in the industry will acknowledge that if by compliance you mean the lodging of required information with the Federal and State governments (think GST, PAYG-W, Payroll & Land Taxes just to name a few), then clearly this is not dead.
Even more than compliance not being dead, the Federal Government is actually ramping up your lodgement requirements. The advent of ‘live data’ from programs such as Xero means that we now have access to more and better information than we’ve ever had. And the government now wants to monitor our business activities ever more closely, and faster too.
The newest rollout of compliance affecting EVERY employer in the country is this thing called Single Touch Payroll (or STP for short). Maybe you’ve heard of it? Employers with more than 20 staff are already required to be enrolled and submitting data… For all the others, you’ll be required to enrol for STP from 1 July 2019.
But what is it? STP is the requirement to lodge yearly figures with the Australian Taxation Office (ATO) EVERY time you pay your employees – in some instances, even if you’re the only employee of your business … So, every time you pay your employees, you’ll also be telling the ATO following things about your business:
Who your employees are;
What their gross earnings to date are;
What tax you have withheld from their gross payments; and
How much their superannuation to date is.
Why has it been introduced? So that the government can keep an eye on your obligations as an employer – it’s a chance for them to make sure that EVERY employer is paying super and PAYG-W as they need to. Hopefully, it will even out the playing field so that those businesses who get ahead by doing the wrong thing won’t be able to do that anymore.
In practical terms, it’s probably only going to take a couple of minutes per pay run to lodge this information with the ATO – once you have the right program to do it.
If you don’t already use an online accounting program, you’ll need to have access to one of the appropriate STP solutions – and there are some low-cost solutions out there for 4 or fewer employees.
Wondering how this will affect your business? Contact us today for a personalised review of your payroll lodgement and STP lodgement requirements…