Single Touch Payroll legislation could change how business pay
A significant factor of the overall efficiency of a business lies in the way it conducts individual practices such as paying employees. A new legislation around Single Touch Payroll could change how companies manage their Superannuation guarantee and Pay As You Go responsibilities.
This could have an effect on the way that payroll software functions going forward, potentially creating a more streamlined practice for employers.
Single Touch Payroll could streamline employers’ tax and superannuation reporting.
Government announces new payroll legislation
The Australian government has proposed changes to the way businesses negotiate tax and superannuation, enabling accounting software to automatically send payroll information to the Australian Tax Office (ATO). The initiative will be tested in the initial months of 2017, and then be made available for businesses.
According to Assistant Treasurer and Minister for small business Kelly O’Dwyer, Single Touch Payroll is likely to drastically simplify employers’ processes, removing red tape and acting as a one-stop-shop for reporting obligations.
“Employers currently manually report Pay As You Go (PAYG) withholdings to the ATO,” she said.
“Under the new Single Touch Payroll this information will be automatically reported to the ATO through Standard Business Reporting (SBR) software.”
She added that the government intends to focus on refining implementation for small businesses, and will make decisions on when to roll out Single Touch reporting following the completion of tests.
“To assist with the transition the Government will provide businesses, with a turnover of less than $2 million, a $100 non-refundable tax offset for SBR enabled software,” Minister O’Dwyer said.
What could Single Touch Payroll mean for businesses?
Single Touch Payroll is likely to have a number of effects on the way businesses pay superannuation and tax.
The Housing Industry Association (HIA) reveals that the initiative could result in several new obligations. For example, employers may need to report when employees have been paid, they’d be obliged to use software as opposed to traditional paper systems, and payments like Pay As You Go would have to be made at the same time staff are paid.
HIA argues that while the initiative could make the process a lot simpler and smoother for businesses, it may actually be the ATO that benefits the most, as it would be able to identify those who don’t pay more easily.
Regardless, it is probable that the new legislation will create a shift in the digital services such as the productivity and recruitment payroll software that companies use in the future.