The ATO has issued a reminder that the single touch payroll (STP) mandatory adoption deadline is imminent. While the initial deadline was 1 July 2019, the ATO provided a three month transition period for employers that needed more time. This 30 September deadline has now passed.
While the number of employers reporting through STP tripled during the transition period, from 100,000 to 350,000 at 16 September according to the ATO, this is still drastically short of the overall employer business population number.
According to an Australian Small Business and Family Enterprise Ombudsman (ASBFEO) report to July 2019, there are 823,551 small employing businesses in Australia. That would put the STP reporting figure quoted by the ATO at a mere 42.5% of its aspired compliance goal.
That word “employing” is important. Using the Australian Bureau of Statistics (ABS) definition of a small business (less than 20 employees), ASBFEO data records that there are 2,259,098 small businesses operating that have between zero and 19 employees. However the majority of these (62%) are sole traders with no employees, with another 27% being micro-businesses with 1 to 4 employees.
There are of course several definitions of what constitutes a small business (revenue of less than $50 million, $2 million or $10 million turnover and so on), but for the purposes of transitioning to the new STP regime, the ATO has adopted the ABS definition.
ATO Assistant Commissioner Jason Lucchese has assured smaller employers that the ATO’s approach will be “flexible, reasonable and pragmatic with no penalties for mistakes, missed or late reports for the first year”.
He also reminds business owners that there are concessions available for employers who don’t have access to a reliable internet connection, as well as those that employ family members or other “closely held” payees, one to four employees, and intermittent or seasonal workers.
To help small employers better understand their options, the ATO has developed a range of handy factsheets and other resources, which are available on ato.gov.au/stp. It has also now released an interactive online quiz to help employers determine their next step.
Note that tax or BAS agents can apply for a deferral on behalf of their clients. For more information about deferrals, visit ato.gov.au/STPdeferrals.