ATO Single Touch Payroll a looming efficiency boon to business and payroll, superannuation sectors

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The Australian Taxation Office’s (ATO) initiative to create ‘real time’ payroll data and superannuation payment efficiency is good Government policy that will have positive repercussions for small business and the payroll industry, according to InPayTech company chairman Don Sharp.

The ATO has slated changes from July 1, 2017 to the payment of Australian wages, called the Single Touch

STP acknowledges the natural payroll process as a fundamental business activity for storing and transmitting key employee data. Further, STP provides the basis to reduce compliance costs for employers while simultaneously, securely leveraging the data to drive better outcomes for employers and employees alike.
“The streamlining of business payroll data and super payments should reduce costs to SMEs, for example eliminating a lot of paperwork that the current Pay as You Go (PAYG) tax system generates for employers who manually track their employee PAYG payments,” Mr Sharp said.

STP also has the potential to benefit the payment of superannuation, as the way wages are paid from July 1 next year becomes more efficient and transparent, with flow-on effects for the payment of Superannuation Guarantee payments.

“The Government is looking to open the option to introduce real-time payments of superannuation at the time of making payroll payments, which is a sensible approach. As money is invested sooner on behalf of the employee, it creates the potential to boost each individual’s retirement savings.

“It may also help to reduce or even eliminate the incidence of non-compliance. Around $3Billion in annual superannuation payments is currently not paid, and this streamlined approach will help to track, monitor and reduce the incidence of non-compliance,” he said.

“What we see with STP is an efficiency bonus for small employers,” Mr Sharp said. “The Government has also announced a one off $100 tax offset for SMEs generating less than $2 million that purchase approved reporting software.”

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