ATO assures small employers transition to STP will be flexible

Earlier this week, Parliament passed legislation to extend single touch payroll (STP) reporting to include all small employers (those with fewer than 20 employees) from 1 July 2019. STP is pay day reporting by employers to the ATO as it happens, this reporting having started on 1 July 2018 for large employers (20 or more employees).

Following the Parliament's approval, commissioner Chris Jordan said that the ATO understands there will be circumstances where more time is needed to implement STP or lodge reports.

"We will offer micro employers (one to four employees) help to transition to STP and a number of alternative options – such as allowing those who rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each time payroll is run," Mr Jordan said in a statement.

He noted that small employers can start reporting any time from the 1 July start date to 30 September 2019.

"We will grant deferrals to any small employer who requests additional time to start STP reporting," Mr Jordan explained.

No penalties for mistakes, missed or late reports will be implemented for the first year, he noted. Additionally, Mr Jordan said, the ATO will exempt employers that are experiencing hardship, or are located in areas with intermittent or no internet connection.

"Pleasingly, many small employers have already taken up STP reporting and they have provided positive feedback that STP makes payroll reporting easier," Mr Jordan added.

By extending STP to all employers, the ATO is hoping to up transparency, provide a level playing field for small business and ensure all Australians get their full superannuation entitlements.