In 50 days, Single Touch Payroll Phase Two will come into effect and require small businesses to collate additional information to meet new government reporting standards. Awareness of the new regulation among small business owners is currently low. This raises issues for potential non-compliance and penalties, so it’s crucial you become acquainted with what’s required now, writes MYOB small business trusted adviser, Chris McComb.
The first instalment of Single Touch Payroll was introduced to reduce businesses’ reporting requirements, enabling Australian businesses to digitally engage with Government agencies in a single process.
This was invaluable during the pandemic for enabling JobKeeper delivery. However, in expanding this model to STP2, the additional reporting businesses will be required to undertake will lead to an adjustment for many.
For SMEs in particular, the regulation changes are a technical process. Five months out from the 1st January 2022 deadline, MYOB data revealed an overwhelming 69 per cent of small business owners did not understand what was needed to become STP2 ready.
On International Accountants’ Day, we’re reminding Australian SMEs that the deadline is approaching and encouraging them to engage an advisor to help them become STP2 compliant. Thirty-two per cent of SMEs have discussed STP2 with a trusted advisor and we expect to see that rise significantly, as an advisor’s knowledge will make the process less time-consuming.
Why should you get STP2 ready now?
- This is an intricate piece of regulation. You may require professional support from a trusted advisor to avoid non-compliance.
- The good news is some accounting software providers have been able to secure deferrals for their customers, with MYOB’s extension to last 12 months. While that will buy more time, it pays to get your head around it now so it’s not a last-minute scramble.
- The deadline falls at a time when many advisors are on leave – they need a break too!
- For many SMEs, the Christmas trading period sees an influx of new staff. STP2 creates additional work in obtaining data from employees. Building these steps into your Christmas employee onboarding process will reduce pressure when STP2 comes into effect.
- Your business needs your focus. Understanding what you need now and having the visibility to action it ahead of time, might prevent you from financial penalties or weeks out of the office filing data retrospectively.
Tips to prepare your business ahead of the STP2 deadline
1. Get started early
Familiarise yourself with STP2 and its requirements as soon as possible. Over the next six weeks, try to plan out when you will start getting information or engaging a professional for support.
2. If you can, engage an advisor to assist with setting up STP2
The regulation is complex and will require professional accounting experience to action the requirements with ease. What might take you five working days, will take them 30 minutes. If you’re a small business that doesn’t usually engage an advisor, this might be the time to do so as a once-off.
3. Know the data requirements for STP2
Make sure you understand the mapping requirements for STP2 before you get started. There are resources available to help you get to grips with it, including this excellent resource on the ATO website. When the legislative change commences, MYOB will have a readiness check available that will allow businesses to make sure their mapping is right at the start and alerts the user when to seek advice from their advisor.
4. Chat with your employees
Once you understand the data that’s required, start having conversations with your employees – old and new – to give them the forewarning of what they’ll need to supply.
5. Go easy on yourself
It’s okay to feel overwhelmed! It’s been a stressful two years for SMEs, so ask for help, speak to your advisor if you have one or contact the ATO with any questions.
As we celebrate International Accountants’ Day, it’s important to remember the key role trusted advisors play in ensuring small businesses can continue to operate and grow. Small business owners have faced significant setbacks over the past two years, making the 2021/2022 holiday trading period both a crucial and exciting time for the small business community of Australia. Let’s spend this time focusing on business opportunities.
Find out more info on STP phase 2 here
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