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Written by Thanh Truong-do
on May 04, 2018

If your company is based in Australia and has 20 employees or more, the Australian Taxation Office (ATO) urges employers to act now and prepare for Single Touch Payroll (STP), the next step in streamlining payroll reporting.

July 1st is quickly approaching and, with it, the challenges of dealing with this new system. STP involves more than simply upgrading your payroll software; many parts of your business are impacted, including IT, payroll, HR and your employees. Ensuring your HR and payroll processes are correct is the first key step to being ready for STP and complying with these new regulations.

Let’s say you have contacted your payroll software provider and you are ready to embrace STP on July 1st. What’s next?

 

Here are 3 things you need to consider before and, more importantly, after July 1st:

1. Review and optimise your HR and Payroll processes.

Understand which payroll processes are impacted and need to be reviewed – for example, your transition from reporting at the end of the financial year to every pay day. It is also crucial to perform ongoing audits to ensure your payroll procedures are not missing the mark in any way.

2. Make sure your data is accurate.

It is important to note that inaccurate data can lead to incorrect submissions to the ATO and liability under greater scrutiny of your business. The ATO will have access to more information and will be able to match data and see whether all PAYG and super guarantee charge withholding obligations are being met.

3. Confirm that your payroll system is change ready.

It can be difficult to easily update payroll systems because of these consistently changing statutory requirements and award rates. Companies must be ready to respond to business changes such as regulatory requirements changes, company reorganisations and restructuring, and new or modified business processes. According to a study done by Eval-Source, companies continue to struggle to adapt and keep up with these changes. It is also a matter of how the alterations are made; payroll managers should be able to make changes without IT support or external consultants. This saves time, money and resources for your organisation and keeps your business running smoothly. So, how change ready is your payroll system?

July 1st is nearing, and it is important to be aware of certain considerations related to this legislative change both before and after this date. It’s critical to consistently review your HR processes and check they are up to date, consider how cash flow will be affected, ensure your data is accurate and analyse your system. Make sure you prepare for the upcoming STP changes, before and after; be change ready.

 

Want to learn more? For the full version of this article, download the e-guide below:

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