Single touch payroll (STP) reporting became mandatory in Australia for all businesses with employees from 1 July 2019. This method of reporting is a way for businesses to transmit year-to-date salary, wages, PAYG, tax and superannuation information from software such as QuickBooks Online to the Australian Taxation Office (ATO). The software sends this information directly to the ATO each time a pay run is finalised.
There are a few steps small businesses should take to make sure they are STP compliant. First, they need to find out if their existing payroll processes are in line with the new compliance requirements. If not, software such as QuickBooks Online Payroll powered by KeyPay will assist them to meet their STP obligations.
Businesses are advised to communicate with their employees about the change of process. Specifically, they should let their employees know to set up a myGov account. The employee’s myGov account is used to view year-to-date payroll information including whether or not superannuation has been paid. They need it to access their income statements, formerly referred to as the Employee Payment Summary.
Faster payroll without errors
Diane Lucas, founder of bookkeeping firm Direct Management.
Diane Lucas, founder of bookkeeping firm Direct Management, says STP-compliant software such as QuickBooks Online is a must. “It’s easy to set up. But if there’s complexity in the payroll process, for instance employees doing shift work, or a need to interpret awards, it’s a good idea to seek counsel from an adviser with experience in this area,” she recommends.
The QuickBooks Online payroll provider KeyPay includes a set-up wizard to activate all the relevant accounts for STP purposes. The next step is to link the file to the ATO, which can be done through a phone call.
Business owners currently using Excel, a manual payroll book or old accounting desktop software will be surprised at the benefits of moving their payroll processing to QuickBooks Online, Lucas says.
“There’s potential for inaccuracies and incorrect payments if you’re manually calculating payroll information and referring back to a tax table book to make pay adjustments,” she notes.
“Using a program like KeyPay, which automatically updates tax tables each year and makes any other adjustments without having to install additional software, you always know you are using up-to-date information when paying employees.”
Additionally with KeyPay, businesses with several employees can pay them simply by uploading a payment file (the ABA file) directly to the bank. This avoids having to manually add the employees’ payments each pay period.
QuickBooks Online delivers other benefits, too. It operates in real time, which means the data is always current and accurate.
“There’s also a great deal of processing automation available through QuickBooks Online to small businesses using bank feeds and cash coding,” Lucas says.
"There's a great deal of processing automation available through QuickBooks Online to small business using bank feeds and cash coding."
She recommends small businesses and their accountants create and apply suitable bank rules in QuickBooks Online to produce data processing efficiencies. “For example, bank fees and bank interest charges can be set to automatically process, so there’s no need to enter manual transactions.”
While QuickBooks Online is designed to be user friendly, implementing any new software system is a good time to make sure your processes and procedures are
as robust as possible.
Lucas suggests the best approach is having somebody who knows the program help set it up and be available for ongoing support.
“It’s much better to get the system right upfront than to make unnecessary errors on an ongoing basis,” she says.
Find out more about the QuickBooks Online KeyPay solution at quickbooks.intuit.com/au/payroll/single-touch-payroll