Since the announcement of Single Touch Payroll (STP) late in 2014, the government says it has been working closely with both software developers and businesses to help it understand the affects the initiative will have in the real world.
Feedback to date has informed government that the proposed start date of July 2016 will simply not be achievable, especially for small and medium sized businesses. There were also concerns regarding resulting cash flow issues.
Small business minister Bruce Billson says the government will now undertake further consultation on the issue to iron out the concerns of the business community. “We want to make sure we get this right because we understand Single Touch Payroll will be a large change for all businesses, especially small business,” Billson said in his media release.
Under STP, it is envisaged that employers’ accounting software will automatically report payroll information to the Tax Office when employees are paid. Read our previous blog explaining STP here
This will eliminate the need for employers to report employee-related Pay As You Go Withholding (PAYGW) in their activity statements throughout the year and employee payment summaries at the end of the year.
In addition, the government aims to streamline Tax File Number (TFN) declarations and Super Choice forms by providing digital services to simplify the process of bringing on new employees.
Given this, the government says it will be consulting with industry groups and small business on a revised proposal to test:
- real time compulsory reporting of payroll information to the Tax Office
- voluntary real time payment of PAYGW and Super Guarantee as an option
- running pilots with small business (starting July 2016) to test various scenarios, including simplifying the process of bringing on new employees with streamlined TFN declarations and Super Choice forms, and the timing for implementation.