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.
The change begins on Monday (July 1).
"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. 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," Australia's inaugural Australian Small Business and Family Enterprise Ombudsman Kate Carnell said.
Tax Office's Assistant Commissioner John Shepherd says the A-T-O is also promising resources for business-owners that might need some extra assistance.
“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,” Mr Shepherd said.
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 ATO 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," Mr Shepherd said.
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.
Visit the ATO web site for details.
