By now you have probably been inundated with emails, tweets, Facebook posts and maybe even Blogs (like this one), letting you know all about Single Touch Payroll which is due to start on 1 July for some employers (typically those with 20 or more employees). However its worth noting that even if you are a substantial employer then you may not have to stress about the entire process just yet.
Most software companies have been feverishly getting their software ready for the introduction of STP, and many are now compliant and ready to go. However even some that are ready have also applied for (and received) a Deferral Code from the ATO. You can use this code to gain some extra time to ensure you are fully ready and take the stress off at this otherwise very busy time of year.
Reckon Accounts Users
Even though the latest versions of all Reckon’s payroll products are STP compliant, Reckon still obtained a Deferral Code from the ATO. If you are using the 2018 version of Reckon Accounts (Either Hosted or Desktop) then you may be able to defer your setup and processing of STP until after 1 July and before the 30th of September 2018 by use of the deferral code 84 513 869
Xero is taking a staged approach to the rollout of STP functionality to their user base and are planning to progressively notify users when the STP functionality is available for use in their Xero data file. Xero have applied for and received a Deferral Code from the ATO of 49 410 109 that is valid until 31 December 2018.
Depending on which version of MYOB you are currently using then it may be possible that you are covered by a MYOB STP Deferral Code granted by the ATO that is valid until 31 May 2019. MYOB have stated that this deferral is in place for those businesses who are unable to upgrade to MYOB’s STP enabled solutions because they are currently using multi-currency, negative inventory, multi location inventory, M-Powered Payment or ODBC or AccountEdge. MYOB have recommended that you contact them directly to obtain the deferral code relevant to your software.
QuickBooks Online (QBO) Users
Intuit (the makers of QBO) have advised that all users of their, in product payroll solution (powered by KeyPay) are ready and able to utilise the STP processing and reporting functionality within the QBO software, so no deferral code is available (or necessary) for QBO users.
So Why do software companies apply for deferral codes?
Basically we see four main reasons (and there could be more) as to why a software company has applied for a deferral code.
1 – They didn’t expect their software to be ready for STP on 1 July 2018
2 – They may have reservations on their software’s ability to handle large scale immediate adoption of STP
3 – They may have had concerns regarding the ATO’s software systems ability to handle the influx of STP data in the early days of STP
4 – They wanted to enable their consulting / implementer network more time to work with clients to upgrade their existing (non STP compliant) software
So how can you use the deferral code?
If you are a business that is covered by a software vendors deferral code then there is nothing you need to do except be STP compliant by the time the code expires.
What happens if I’m not ready for STP and my software provider doesn’t have a deferral code for the software version I’m using?
If your software is ready for STP and you aren’t then you can still apply for your own Deferral Reference Number (DRN) with the ATO, but you might need to be quick if you are a business that is required to be STP ready by 1 July 2018 (*).
What if I didn’t have 20 (or more) Employees at 1 April 2018 (or at 1 April 2019) when will I be required to be STP compliant?
The short answer on this is ……… Nobody really nows?
At this stage it is proposed for STP to be mandatory for all employers (even those with 19 or fewer employees) by 1 July 2019, however legislation in relation to this start date is not law at the time of writing this update (28 June 2018) so watch this space.
Can you help me with my STP processes and procedures?
Yes – simply call us on 1300 289 846 or email firstname.lastname@example.org to discuss how we can assist you in the setup, training and support of you and your team in the operation of STP.
Can you help me with assessing my future software strategy?
Yes – we are accredited consultants, partners and advisors in multiple small and medium sized business software solutions (both cloud and on premise), so if you would like an independent assessment as to what solution is right for you and your business then simply give us a call on 1300 289 846 or email email@example.com
There are also a myriad of other components to STP in most payroll software solutions, including;
- How to Identify and manually communicate your unique Software ID to the ATO before your first STP lodgement (especially relevant if using Cloud / Hosted STP software)
- How to ensure that your Employee Allowances are correctly configured in the software before your first STP lodgement
- How to share your file with your Advisor (e.g. Bookkeeper, Accountant, Payroll Bureau) for STP processing and lodgement
- Understanding that STP lodgement is not automatic and requires several review steps before lodging with the ATO
- Understanding the various types of STP Pay Events that are required and when, to be submitted to the ATO
- What other information do I need to configure in my payroll software before uploading any data to the ATO (E.g. Employee Codes/Numbers)
I hope that this helps in taking some of the stress out of this End of Financial Year and here’s wishing you a smooth STP rollout and a fantastic 2018/19.
Happy New (Financial) Year
(*) Note: The first 12 months of STP reporting is viewed by the ATO as a Transition Period in which they are assisting employers in the adoption of STP. Therefore employers will not be liable for “Failure to report on time” penalties.