Single Touch Payroll Is Here – 1st July 2019!

What Single Touch Payroll (STP) Means

Single Touch Payroll (STP) is a new way of reporting tax and super information to the ATO.

Employers must send their employees’ tax and super information to the ATO when pay is processed in each pay period, using payroll in your accounting software which offers STP reporting,

  • Large employers with 20 or more employees should now be reporting through STP or have applied to the ATO for a later start date.
  • Small employers with 19 or less employees will need to report through STP from 1 July 2019. This is a gradual transition, and the ATO providing flexible options.

How STP Works

STP works by sending tax and super information from a business’s payroll accounting software to the ATO when each pay period is processed.

Employers process their payroll, pay employees and issue pay slips as per normal. After each pay period, this information is then sent to the ATO using the STP enabled software instructions.  Usually by a click of a button!

ATO systems will match the STP information to their employer and employee records. Employees will be able to see their year-to-date tax and super information through myGov and is updated every time wages have been reported by STP.

At the end of the financial year, employers need to finalise their STP data by making a declaration with the ATO through their software. This is due on the 14th July and replaces the previously required payment summary declaration.

There is also no need to provide employees with an annual payment summary/group certificate when you STP report. STP Reporting is replacing this requirement as you have already given them this information. This is made available to employees through myGov.

Payment summaries are required for the 2019 financial year where it has not been reported through STP or if you are exempt from STP Reporting.

What This Change Mean To You

  • Each time you prepare payroll and pay your employees, you will also send your payroll data using your STP enabled software.
  • If you made a mistake, do not panic, you can correct it in the next pay event which will update your STP data to the ATO.
  • You are not required to provide payment summaries to your employees for the payments you report and finalise through STP.
  • You will continue to report and pay your employees’ superannuation entitlements through your existing Super Clearing House (Superstream)
  • You need to submit the STP finalisation declaration of the financial year end.

Preparing For Single Touch Payroll

Determine how you will report through STP

  • If you already use a STP compliant software, you will need to register
  • If you use a spreadsheet for your payroll records, you will need to move to a software that is STP compliant.
  • If you currently use a desktop software that does not support STP reporting, you will need to move to a software that is STP compliant.
  • If you do not use a payroll solution that offers STP reporting, you will need one.
  • If you currently do not use any of the STP compliant products for your STP reporting obligation, do not worry, Xero has a range of STP compliant products that can support you.

Let us know if we can assist you in transitioning to STP Reporting.

Review your business process and data

  • Check your employee information is accurate, including names, addresses and dates-of-birth
  • Review superannuation data and payments are correct

Who will do your STP Reporting?

  • STP Reporting is sent to the ATO by the person who prepares payroll
  • Ensure who is submitting the STP Reporting is able and confident to do so
  • If you are using a registered tax or BAS agent to lodge your STP reports on your behalf, they will register for STP Reporting along with your registration.

Get Ready For STP With Xero

Getting ready for single Touch Payroll (STP) reporting is easy with Xero.

If you are using Xero Payroll, you are already using STP compliant software, you only have to opt in to STP Reporting.

This is a major change to the way we report staff information to the ATO – be sure that you are ready. Speak to us immediately if you need assistance.

Questions To Ask Before Applying For A Bank Loan

Even though many of us dislike the banks and we especially frown upon the profits they make year after year, if used correctly and wisely the banks can be utilised to help us create financial freedom in retirement.

Using the banks services to build wealth is a simply strategy.

We borrow money from the bank for as little cost as possible, and then use that to get a greater return than what the bank is charging us. This strategy can be used for capital, business or personal gains.

Most of you will find that at some stage or another throughout your life, you will need to apply for a bank loan of some type, either to make a major purchase like the purchase of your home or that investment property or maybe to keep your business operating or simply keeping alive the dream of creating financial freedom in your retirement.

Organising a bank loan can be a time-consuming process for any person which makes it important to ask yourself the right questions in order to not only give your application the best opportunity to succeed but to gain some reassurance that the loan is the best option to help you gain financial freedom.

There are a number of items that you all should consider before committing to taking out a bank loan.

1. What is the likelihood you will qualify for the loan?

It is important to attempt to have an idea early on about the likely success of your loan application.

Generally, the best way to gauge your chance of success is to contact the bank, and to enquire about the specific requirements that need to be covered before applying. Usually, the right loan broker can be used advantageously here.

Caution – there is a need to be careful. If lenders check your credit record and deny your request based upon what they find, this can have a very negative impact on your credit score. As a result, it will be even more difficult to borrow in the future because banks could look at that denial and decide that you’re too much of a risk. A worst-case scenario may then require you to consider alternative funding methods usually with much higher costs attached.

2. How much cash do you actually need?

Before applying for your loan, it’s good to have an idea of how much cash you will actually require. One way to determine this is to create a cash flow projection. Such a projection will help you align the requirements of your loan repayments with the terms and conditions attached. Always allow for a little more than what you think!

3. How much are your assets really worth?

Many people make the common mistake of overvaluing their assets, such as their private residence.

Generally, we always think our home is worth more than what the bank thinks its worth. As a result, you may submit an application with unreasonable expectations. Bank or lending institutions will always value your assets below the value you believe they are worth or even what we paid for them, and therefore, will only lend a percentage of the assets value. That percentage can vary dramatically depending on the bank you approach, as well as the age of your assets you are using for collateral. The idea here is to shop around and get different options.

4. Is your cash flow healthy enough to repay the loan?

You will most likely have to provide the bank with your latest tax return and even financial projections, so it’s important you present them with a plan on how you expect to meet your repayment obligations. Your wages and current liabilities are a couple of factors that will always be taken into account. Your cash flow represents how well you are positioned to meet any loan repayments. The healthier your cash flow is, the more likely you are to have your loan approved. The healthier your cash flow, the more likely the bank will lend you more.

5. Do you really need the loan?

A loan should always be secured to increase your capital growth or financial freedom, not to fund any of your current expenses. There’s no point to borrowing money to cover current costs, as you won’t generate additional revenue. You will find yourself in a very similar situation when your loan expires. The important thing here is before securing any loan, no matter what the purpose, identify the areas of your financial situation that can lead to growth, such as increased rental or investment income or capital appreciation.

We have qualified loan brokers that can help the loan process hassle free for you – let us know immediately if you would like to utilise this free service!

For Your Calendar…

  • 5 Jun Lodge tax return for all entities with a lodgment due date of 15 May 2019

    Lodge tax returns due for individuals and trusts with a lodgment due date of 15 May 2019 provided they also pay any liability due by this date

    Note: This is not a lodgment due date but a concessional arrangement where failure to lodge on time (FTL) penalties will not apply if you lodge and pay by this date.

  • 21 Jun Lodge and pay May 2019 monthly business activity statement.

  • 25 Jun Lodge 2019 Fringe benefits tax annual return for tax agents if lodging electronically. Payment (if required) is due 28 May.

  • 30 Jun Super guarantee contributions must be paid by this date to qualify for a tax deduction in the 2018–19 financial year.