Single Touch Payroll (STP) is a massive change that will require all employers to electronically report to the ATO. It is already mandatory for larger employers, and it is proposed to be mandatory for all employers from 1 July 2019.

In welcome news, the ATO has indicated that microbusinesses (with up to 4 employees) will not be required to purchase payroll software to be compliant with the proposed STP regime. They are apparently exploring a number of alternative options for these microbusiness such as the development of app and internet banking alternatives, initially allowing a registered tax agent or BAS agent to report quarterly instead of each payrun, as well as possible exemptions if you have no internet or an unreliable internet connection. These options will not be available to larger employers.

We’ll have to wait and see what will come out of all of that, but either way you’ll need to be thinking about how you will cope with the change now. We are already setting up a lot of employers on STP compliant systems to be ready for the change, and employers with 5 or more employees should not delay.