Why small businesses need to know what STP is

Payrolls are going fully digital from July 1, affecting more than 750,000 small and micro-businesses. Here’s what they need to know.

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Payrolls are going fully digital from July 1, affecting more than 750,000 small and micro-businesses. Here’s what they need to know.

The introduction of Australian Taxation Office’s single touch payroll (STP) is here, meaning hundreds of thousands of small businesses must switch to the mandatory real-time reporting system. 

Single touch payroll sends tax and superannuation data directly to the ATO every payday, replacing paper payment summaries (group certificates) with online income statements and enabling the tax office to better monitor compliance like super payments.

The changes mean some businesses, which might have gotten by without using any software at all, will now be required to purchase STP-enabled software to report their weekly or fortnightly pay run online. 

With Xero it takes just a few clicks. Born in the cloud, Xero is a beautiful, easy-to-use platform for small businesses and their advisers. You can start reporting salaries and wages, PAYG withholdings and more directly to the ATO. 

Xero provides its 1.8 million subscribers with connections to a thriving ecosystem of 700+ third party

apps and 200+ connections to banks and financial service providers. Xero is always secure and reliable and offers support 24/7.

Matthew Prouse, head of industry at Xero Australia, says research conducted by global small business platform Xero revealed the majority of the respondents (64 per cent) said they would embrace any changes

that would help them work smarter or faster, but the barriers to adoption are preventing them moving ahead.

“Advisers need to work with small business owners to help them navigate the process of understanding that STP adoption will provide them with a major boost to their business on a range of measures from efficiency to time saving and accuracy,” he said. “It’s a classic change management situation where we need to connect the need for change to a clear benefit they can achieve.” 

He said managing EOFY and tax time con sometimes be overwhelming for some business owners, but it’s not purely a time of stress.

“For most small business owners, EOFY is a positive time – a time for review, reflection, and

refreshing the outlook for the new financial year ahead,” he said. “But if you’re feeling stressed about all

of the paperwork required with tax time – you’re not alone. I’d look at it like a reminder to

book an appointment with a registered BAS or tax agent.” 

ABOUT XERO

Born in the cloud, Xero is a beautiful, easy-to-use platform for small businesses and their advisers. Xero provides its 1.8 million subscribers with connections to a thriving ecosystem of 700+ third party apps and 200+ connections to banks and financial service providers. On the inaugural 2018 Financial Times FT1000 High-Growth Companies Asia Pacific list, Xero was the fastest-growing tech company in the $200 million+ segment. Xero won ‘Bookkeeping software of the year’ from the Institute of Certified Bookkeepers UK in 2018 and was rated by Canstar Blue as Australia’s best accounting software over four consecutive years, 2015-2018.

Originally published as Why small businesses need to know what STP is