June EOFY rush sees over 43,000 small employers sign up for STP
Over 43,000 small employers signed up for STP during the June EOFY rush, the ATO has revealed.
On 1 July, single touch payroll (STP), one of the biggest tax changes since the introduction of GST, became an obligation for all businesses across Australia, no matter their size.
According to the ATO, as at 30 June, over 108,000 small employers are reporting through STP, with 43,000 signing up for STP in June alone.
STP started from 1 July 2018 for large businesses and was extended to employers with 19 or fewer employees from 1 July.
The current number of compliant businesses, however, equals a rough 15 per cent of the total 730,000 businesses the ATO estimated it would need to onboard.
A spokesperson for the Tax Office told Public Accountant on Tuesday that there has been a strong uptake of STP by small employers in recent months, but the numbers reveal that onboarding still has a long way to go.
The ATO has reiterated that small business will not be penalised for mistakes, missed or late reports for the first year, but only if they have made a genuine attempt to switch to digital.
“The ATO has stated that small employers have until 30 September 2019 to engage with us through reporting in STP, seeking a deferral or opting for quarterly reporting where applicable. We will grant deferrals to any small employer who requests additional time to start STP reporting,” the spokesperson said.
The ATO added it will provide exemptions from STP reporting for employers experiencing hardship, or in areas with intermittent or no internet connection.
But despite the levy and certain eases, tax practitioners are advising small businesses to begin reporting sooner to ensure their transition to digital is a smooth process.
Once the ATO's penalty does kick in, it will be calculated at the rate of $210 for each 28 days or part thereof that the STP report(s) is/are overdue (to a maximum of $1,050). The Tax Office has, however, said it will generally apply these penalties where an employer is routinely and repeatedly late.
Additionally, false and misleading statements within an STP report will be penalised according to law.