Tracy & Associates Accounting warns small business payroll danger is still under the radar
Axel Tracy, director of small business accounting and services firm BAS Tracy & Associates Accounting, said the disruption caused by the pandemic and the resulting skills shortage has blinded many small employers to the impacts of the introduction of “STP2”. the second phase of the ATO regarding Single Touch Payroll (STP) reporting obligations. Tracy said, “STP2 is a complex change to payroll reporting requirements, and the daunting thought is that it’s already here. STP2 was officially launched on January 1 earlier this year, but many small businesses ignore it or rely too unconsciously on the ATO’s deferral options. As the recent spike in insolvencies shows, the ATO’s soft and gentle approach will eventually come to an end.
Single Touch Payroll (STP) has been a real-time payroll reporting system at the ATO for Australian employers since 2018. With all deferrals and exemptions for Phase 1 of STP having expired, most companies or their accountants have accustomed to depositing their STP deposits during their payroll cycles. However, Phase 2 of the STP is not a linear extension of what was required in the first phase. The level of payroll data granularity increases in this second phase, and the stakeholders who will rely on the reported data go far beyond the ATO alone.
Other government departments and agencies are driving the introduction of STP2 and are seeking further Australian payroll information for their own functions. For example, Services Australia is seen as a key recipient of new STP2 reporting data, along with ABS and the Child Support Agency. As Axel Tracy noted, “With more users of STP2 data, there is a growing need for these repositories to be reliable and timely. It is no longer simply between the company and the ATO. There can be real consequences for small businesses, and especially their staff, if multiple agencies and government departments are fed unwanted data. In a time of low unemployment and skills shortages, and of course great resignation and silent quits, now is not the time for small business employers to cause external headaches for their employees because their payroll systems are not clear, orderly and up to date. .”
While larger companies have the resources and teams to stay current and ahead of STP2 and other changes, it is smaller companies that risk being left behind if this issue is not prioritized. Small business employers are encouraged to keep up to date with reviews from their accounting software vendors, use the ATO website for detailed details, or proactively engage with their accountant or vendor. of payroll services to understand the support they can offer with STP2 configuration and implementation.
Principal and Registered BAS Agent, Tracy & Associates Accounting
Tel +61 414 833 258