Changes coming that will affect all small business owners
GROWING pains are anticipated as all small businesses across Australia, even those with just a single employee, are expected to have to digitise their payroll processes by the middle of the year.
Single Touch Payroll, or real-time payroll reporting, was made a requirement for businesses with 20 or more employees as of July 1 last year.
Legislation to extend STP to include employers with 19 or less employees has been passed by the Senate and will be considered by the House of Representatives when parliament resumes.
If passed, all businesses will be required to comply with the system from July 1.
It means they will need to send the Australian Taxation Office their employees' tax and super information each time they run their payroll through via a software program.
Employees will be able to see their year-to-date tax and super information online and allow them to access their information without requesting it from their employer.
Harding Martin Chartered Accountants director Neil Harding said the transition process for most businesses in Ipswich had been pretty seamless.
"It's because those (businesses) have usually got the software (in place) which enables them to do it,” Mr Harding said.
"It's not so scary. We don't see many clients these days who bring in manual records.
"But you've got to look at the businesses where you maybe have just the one or two employees, they're potentially not doing it.”
Mr Harding said it was those smaller businesses that could be stung by the costs that can come along with digital payroll systems.
"They may have electronic software to do their book keeping. But the software usually has additional fees attached to it to add a payroll function,” he said.
"They're going to have to adapt.
"When you talk about the costs of an online or cloud type software they have a basic package which can be a very small cost.
"But as soon as you say you want to go and add an employee to it, it can double or treble the cost of the monthly charge.
"If it's only one or two employees it's not a lot but if you jump above five or six (it can be significant).”
Owners urged to transition to digital
A GROUP of 70,000 employers in Australia don't report regularly using digital means or don't currently use payroll software, but the Australian Taxation Office said some exceptions would be made.
"The ATO is currently working with the software industry to support and encourage them to develop low cost or no cost options for small business employers,” an ATO spokesperson said.
"They will include options for reporting to the ATO through solutions other than payroll systems, as some smaller businesses do not need payroll software.
"We expect new solutions to be available by 1 July 2019 - the expected start date for employers with 19 employees or less employees.
"We will provide exemptions from STP reporting for employers experiencing hardship, or in areas with intermittent or no internet connection.”
Business owner Pamela Brock has already made the move to a digital payroll system and uses Xero software.
She has run the Florrey Bel Country Cafe in North Tivoli since June alongside her sister Sandra and they currently have eight employees.
She said the digital move hadn't make her payroll processes more efficient but it was a positive move for the small business world as it allowed employees instant access to their data.
"We're already used to it,” Ms Brock said.
"If (business owners) look into it, there are difference packages they can get (to suit them).”
"I don't think it's necessary for the employer but it definitely is for the employee.”
"The other positive thing is it gives employment to other people as well (for those designing the software).”