Small businesses grapple with the ATO's ‘biggest change since the GST’

When the new financial year starts on Monday, July 1st, small businesses with fewer than 20 staff will face sweeping changes in the way they interact with the Tax Office.The ATO describes it as the ‘biggest change since the GST’ and, as SBS Small Business Secrets found, some owner-operators are struggling with the new system.

It’s described by some as a once-in-a-generation change: now businesses with fewer than 20 staff must switch to an online payroll system called ‘Single Touch Payroll’.

The Australian Taxation office - ATO describes it as the "biggest change since the GST" and some owner-operators, especially migrants and those whose first language isn't English, are struggling with the new system.

Despite this change beginning on Monday, July 1st, this restaurant-owner, Nicole Ha, says they're just not ready for it.

"The new Single Touch Payroll – yep – it's very confusing at the moment. Ohh, ha ha ha, we haven’t even started yet, we just we’re not prepared yet."

John Shepherd was the Tax Office's Assistant Commissioner for the Single Touch Payroll program.

“Look this is a big change and some have said the biggest change since GST.  It does revolutionise payroll reporting and this is just the start!"

Kate Carnell is Australia's inaugural Australian Small Business and Family Enterprise Ombudsman.

She says for some, this new financial year will bring a shock. 

"This is now the law.  There are some really good parts about it, it does reduce your requirements to give your staff the documentation you currently have to with regard to superannuation payments. It really can cut your red tape, cut your paperwork, but you do need to act. And we believe that as many as 50 per cent of small businesses have no idea that this is happening, so the message needs to get out there!"

John Shepherd says the A-T-O is also promising resources for business-owners that might need some extra assistance.

"We really appreciate that the multicultural community and a big proportion of small businesses have English not as their first language and we see it as a priority to be able to translate our materials and make them available in different languages and also make translation services available through our call centre for people to make sure they understand what’s required and can get the help they need."

Businesses in remote areas with limited internet can apply for an extension.

And there’s low- or even  no-cost Single Touch Payroll-compliant software on the A-T-O website.  

Almost two-thirds of Australia’s two million small businesses are one-person operations, and around a quarter employ between one and four people.

And it’s these smaller employers, called ‘micro-businesses’ that are expected to struggle most, says John Shepherd. 

" We do still have - for what we call very small or micro businesses - still high rates of quite manual processes or what’s used frequently still is (Microsoft) EXCEL to manage their weekly or fortnightly payroll."

The new Single Touch Payroll system also tracks superannuation payments, so those businesses that aren’t paying super or are paying wages in an unusual way will be very visible to the Tax Office.

Businesses with more than 20 staff switched to Single Touch Payroll last year, so this tax time, up to nine million employees will report without payment summaries, using information available online at MyGov.

John Shepherd says the Tax Office is trying to help small businesses get into the new system as soon as possible.

He says although July the 1st is the start date, it’s a big change for smaller employers so they'll have until September the 30th to start their reporting or, if they need it, they can request more time.

“The call to arms is not to put it off altogether but to start making plans now and communicate with us, either directly or through your agent.”

Visit the ATO web site for details.

The ATO’s translating and interpreting service is available on 13 14 50 or at

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