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May 25

STP (Single Touch Payroll) – A Guide for Small Businesses

Single Touch Payroll (STP) is a mandatory payroll reporting system introduced by the Australian Taxation Office (ATO) to streamline payroll processes and ensure compliance with tax and superannuation obligations. Here’s what small businesses need to know about STP, how it works, and how to stay compliant.

What Is Single Touch Payroll (STP)?

STP is a payroll reporting method that requires employers to report employee payments, including wages, PAYG withholding, and superannuation, to the ATO each time they process payroll. The information is submitted electronically, ensuring accurate and up-to-date reporting for every pay cycle.

How Does STP Work?

STP reporting is integrated into payroll software, making it easier for businesses to comply with ATO requirements. Each time you run payroll, the following information is automatically reported to the ATO:

  • Employee salaries and wages
  • PAYG withholding amounts
  • Superannuation contributions

The ATO uses this data to keep track of employee income, tax liabilities, and super contributions in real time, reducing the need for separate year-end reports like the Payment Summary Annual Report (PSAR).

STP Phase 2 – What’s New?

STP Phase 2 introduces additional reporting requirements to provide more detailed information about employee income and tax obligations. Key changes include:

  • Reporting income by income type (e.g., salary, allowances, bonuses)
  • Identifying tax treatment codes for each employee
  • Disaggregating gross payments to provide more transparency
  • Reporting child support deductions and garnishees

Businesses must ensure their payroll software is updated to meet STP Phase 2 requirements and avoid potential ATO penalties for non-compliance.

Benefits of Single Touch Payroll (STP)

Implementing STP offers several benefits for small businesses, including:

  • Compliance: Ensure accurate and timely reporting to the ATO, reducing the risk of fines and penalties.
  • Efficiency: Streamline payroll processes and eliminate the need for year-end PAYG summaries.
  • Transparency: Provide employees with real-time access to income and tax data through MyGov.
  • Record-Keeping: Maintain accurate and up-to-date payroll records for audit purposes.

How to Set Up STP for Your Business

To comply with STP requirements, small businesses need to:

  • 1. Choose STP-Enabled Payroll Software: Ensure your payroll software is STP-compliant. Popular options include Xero, MYOB, and QuickBooks.
  • 2. Register for STP Reporting: Register your business with the ATO to commence STP reporting.
  • 3. Set Up Employee Records: Collect accurate employee information, including TFNs, pay rates, and superannuation details.
  • 4. Configure Payroll Software: Set up payroll categories, pay schedules, and tax codes in the software.
  • 5. Conduct a Test Run: Run a test payroll to ensure data is reported correctly to the ATO.

Common STP Reporting Mistakes to Avoid

  • Incorrect employee details, such as TFNs or pay rates
  • Failing to report superannuation contributions
  • Not reporting all pay cycles, including bonuses and overtime
  • Late or missed STP reports, resulting in ATO penalties

What Happens If You Miss an STP Report?

Missing an STP report can result in fines and penalties from the ATO. If you miss a report, notify the ATO immediately to avoid further consequences. Regularly reviewing payroll records and ensuring data accuracy can help prevent missed reports.

Need Help with STP Reporting?

Setting up and maintaining STP can be complex, especially with the new Phase 2 requirements. At Northern Beaches Bookkeeping Solutions, we provide expert support to ensure your payroll is compliant and accurately reported to the ATO. Contact us today to learn more.

Payroll & Employees, Single Touch Payroll by Coralie Downie
Feb 16

Is It a Scam Call? How to Spot Fraudulent Calls Targeting Small Businesses

Scam calls targeting small businesses are becoming increasingly common, with fraudsters posing as the ATO, banks, or other government agencies. These calls often threaten legal action, demand payments, or request sensitive information. Knowing how to spot a scam call can protect your business from financial loss and identity theft.

What Are Scam Calls?

Scam calls involve fraudulent callers pretending to be legitimate organisations, such as the ATO, utility companies, or financial institutions. Their goal is to deceive business owners into providing sensitive information, making payments, or granting access to business accounts.

Common Types of Scam Calls Targeting Small Businesses

Scammers use various tactics to trick businesses. Some of the most common types of scam calls include:

  • Fake ATO Calls: Scammers claim you owe a tax debt and demand immediate payment to avoid legal action.
  • Invoice Payment Scams: Fraudsters pose as suppliers or vendors and request payment for fake invoices.
  • Utility Scams: Callers threaten to disconnect electricity, water, or gas if immediate payment is not made.
  • Bank Verification Scams: Scammers ask for account details under the guise of verifying bank information.

Red Flags of a Scam Call

Scam calls often share common warning signs. Be cautious if the caller:

  • Demands immediate payment or threatens legal action
  • Requests sensitive information, such as bank account or TFN
  • Uses aggressive or threatening language
  • Asks for payment via unusual methods, such as gift cards or wire transfers
  • Refuses to provide contact information or a call-back number

How to Verify a Legitimate Call

If you receive a suspicious call claiming to be from the ATO or another organisation, follow these steps to verify its legitimacy:

  • Ask for the caller’s name, department, and contact number.
  • Hang up and call the official number of the organisation to verify the request.
  • Never provide sensitive information over the phone without verifying the caller’s identity.
  • Visit the ATO’s Verify or Report a Scam page to check for recent scam alerts.

What to Do If You Receive a Scam Call

If you suspect a call is a scam, take the following steps:

  • Do Not Engage: Hang up immediately without providing any information.
  • Report the Call: Notify the ATO or relevant authority about the scam call.
  • Monitor Accounts: Check bank statements for unauthorised transactions.
  • Educate Staff: Inform employees about common scam tactics and how to respond safely.

Protecting Your Business from Scam Calls

To reduce the risk of falling victim to scam calls, implement these protective measures:

  • Register Your Business for Do Not Call: Add your business number to the Do Not Call Register.
  • Use Caller ID: Verify caller information before answering calls.
  • Implement Call Screening: Use phone systems that screen calls before connecting them to staff.
  • Educate Employees: Provide training on recognising and handling scam calls safely.

Need Help Managing Scam Risks?

At Northern Beaches Bookkeeping Solutions, we help businesses protect their financial data and stay vigilant against scams. If you’re unsure about a suspicious call or need assistance with fraud prevention, contact us today for expert advice and support.

Northern Beaches Bookkeeping Solutions Posts by Coralie Downie
Fixed Price Bookkeeping Services
Feb 16

Behind With Your Super Payments? How to Catch Up and Avoid ATO Penalties

Falling behind on superannuation payments can have serious consequences for small businesses, including financial penalties and damaged employee trust. If you’re behind on super payments, it’s important to take immediate action to catch up and stay compliant with ATO regulations. Here’s a step-by-step guide to getting back on track.

What Happens If You’re Behind on Super Payments?

If superannuation payments are not paid by the quarterly due date, the ATO may impose a Superannuation Guarantee Charge (SGC). This charge includes:

  • Unpaid Super Amount: The amount of super that should have been paid to employees.
  • Interest on Unpaid Super: Currently set at 10% per annum, calculated from the due date.
  • Administration Fee: $20 per employee per quarter for missed payments.

Steps to Catch Up on Unpaid Superannuation

To resolve unpaid superannuation and minimise penalties, follow these steps:

  • 1. Calculate Unpaid Super: Review payroll records to identify missed super payments and calculate the total amount owed.
  • 2. Lodge an SGC Statement: Complete a Superannuation Guarantee Charge (SGC) statement to report unpaid super to the ATO.
  • 3. Pay the SGC: Pay the SGC directly to the ATO, including unpaid super, interest, and administration fees.
  • 4. Update Payroll Records: Adjust payroll records to reflect paid super and ensure future contributions are calculated correctly.
  • 5. Implement a Payment Plan: If you can’t pay the full SGC amount upfront, contact the ATO to discuss a payment plan.

How to Avoid Falling Behind on Super Payments

Preventing future superannuation issues requires a proactive approach to payroll and financial management. Consider the following strategies:

  • Automate Super Payments: Use payroll software to calculate and pay super automatically each pay cycle.
  • Set Payment Reminders: Schedule reminders for quarterly super due dates to avoid missing payments.
  • Reconcile Payroll Regularly: Review payroll reports to verify that super amounts are accurately calculated and paid.
  • Hire a Bookkeeper: A qualified bookkeeper can monitor super obligations, lodge SGC statements, and ensure compliance.

Superannuation Due Dates to Remember

Superannuation payments are due quarterly. Mark these key dates in your calendar:

  • 1st Quarter (July – September): Due by 28 October
  • 2nd Quarter (October – December): Due by 28 January
  • 3rd Quarter (January – March): Due by 28 April
  • 4th Quarter (April – June): Due by 28 July

Penalties for Late Super Payments

The ATO takes unpaid super seriously. If you fail to pay super on time, you may face the following penalties:

  • Superannuation Guarantee Charge (SGC): Includes the unpaid super, interest, and admin fee.
  • Failure to Lodge Penalty: Additional fines for not lodging an SGC statement on time.
  • Director Penalty Notices: Company directors may be held personally liable for unpaid super.

Need Help Catching Up on Unpaid Super?

If you’re behind on super payments and unsure how to resolve the issue, Northern Beaches Bookkeeping Solutions can help. Our experienced bookkeepers can review your payroll records, calculate unpaid super, and assist with lodging SGC statements to the ATO. Contact us today to get back on track and avoid further penalties.

Payroll & Employees, Superannuation by Coralie Downie
Feb 16

Single Touch Payroll (STP) – A Complete Guide for Small Businesses

Single Touch Payroll (STP) is a payroll reporting system that requires employers to report employee wages, tax withheld, and superannuation contributions to the Australian Taxation Office (ATO) every time payroll is processed. For small businesses, STP simplifies payroll reporting, reduces paperwork, and helps ensure compliance with ATO regulations.

What Is Single Touch Payroll (STP)?

Introduced by the ATO, Single Touch Payroll (STP) is a mandatory payroll reporting system that requires employers to report payroll information directly to the ATO at each pay run. STP covers:

  • Employee wages and salaries
  • PAYG withholding amounts
  • Superannuation contributions

Instead of submitting separate reports at the end of the financial year, STP reports are lodged electronically through STP-enabled payroll software, providing the ATO with real-time payroll data.

Benefits of Single Touch Payroll for Small Businesses

Implementing STP offers several advantages for small businesses, including:

  • Streamlined Reporting: Reduces paperwork and manual data entry, as payroll information is reported automatically each pay cycle.
  • Improved Compliance: Ensures accurate and up-to-date payroll data is submitted to the ATO.
  • Employee Transparency: Employees can access their year-to-date income, tax, and super information through MyGov.
  • Reduced Risk of Penalties: Timely reporting reduces the risk of ATO penalties for late or inaccurate payroll reporting.

How to Set Up Single Touch Payroll (STP)

To implement STP for your small business, follow these steps:

  • 1. Choose STP-Enabled Payroll Software: Select payroll software that is ATO-compliant and supports STP reporting, such as Xero, MYOB, or QuickBooks.
  • 2. Register for STP Reporting: Notify the ATO that you will be using STP by updating your payroll software settings.
  • 3. Collect Employee Information: Ensure that employee records include accurate information, such as Tax File Numbers (TFNs), superannuation details, and pay rates.
  • 4. Configure Payroll Settings: Set up payroll categories, pay cycles, and tax codes in the software.
  • 5. Conduct a Test Run: Run a test payroll to confirm that data is reported accurately to the ATO.

Understanding STP Phase 2 – What’s New?

STP Phase 2 introduces additional reporting requirements, including:

  • Reporting income by income type (e.g., salary, allowances, bonuses)
  • Separating tax treatment codes for different income streams
  • Including child support deductions and garnishees

Businesses must ensure their payroll software is updated to meet STP Phase 2 requirements to avoid non-compliance penalties.

STP Reporting Deadlines

STP reports must be lodged each pay cycle, typically on the same day payroll is processed. The ATO provides some flexibility for small businesses, allowing them to lodge reports within 24-48 hours of processing payroll. End-of-year finalisation must be completed by 14 July.

Common STP Mistakes to Avoid

  • Failing to report superannuation contributions
  • Incorrect employee details (e.g., TFNs or pay rates)
  • Not marking the STP report as “Final” at the end of the financial year
  • Reporting incorrect pay dates or pay cycles

What If You Miss an STP Report?

If you miss an STP report, notify the ATO immediately to avoid penalties. Correct the missed report by lodging an amended STP report, ensuring that all payroll data is accurate and complete.

Need Help With STP Reporting?

Implementing and maintaining STP can be challenging, especially with new Phase 2 requirements. At Northern Beaches Bookkeeping Solutions, we provide expert payroll support to ensure your business remains compliant. Contact us today to learn more about our payroll and STP reporting services.

Payroll & Employees, Single Touch Payroll by Coralie Downie
Feb 16

Do You Export Goods or Services in Australia? Essential Bookkeeping Tips for Australian Businesses

If your business exports goods or services, it’s important to understand how to manage bookkeeping and tax compliance effectively. From GST exemptions to foreign currency transactions, here’s a comprehensive guide to bookkeeping for businesses involved in exporting from Australia.

What Are Exported Goods and Services?

Exported goods and services refer to products and services sold to overseas customers. In Australia, exports are generally GST-free, meaning you do not charge GST on sales to international customers. However, accurate record-keeping is essential to substantiate GST-free claims and comply with ATO requirements.

Key Bookkeeping Considerations for Exporting Businesses

Exporting goods and services can complicate bookkeeping processes, particularly when dealing with foreign currencies, international shipping, and tax exemptions. Here are the key considerations for effective bookkeeping:

  • 1. Record All Export Sales: Maintain accurate records of all export transactions, including invoices, shipping documents, and payment receipts.
  • 2. Track Foreign Exchange Rates: If you receive payments in foreign currencies, record the exchange rate at the time of the transaction for accurate reporting.
  • 3. Apply GST Exemptions Correctly: Confirm that the goods or services qualify as GST-free exports and apply the correct GST codes in your accounting software.
  • 4. Manage Shipping and Freight Costs: Record shipping and freight costs separately to track expenses and manage cash flow effectively.
  • 5. Document Proof of Export: Retain proof of export, such as shipping documents and customs declarations, to substantiate GST-free claims.

GST Implications for Exported Goods and Services

Exports of goods and services from Australia are typically GST-free, but businesses must maintain documentation to substantiate the GST exemption. To qualify for GST-free treatment, the goods must be exported within 60 days of payment or invoice, whichever occurs first.

Common GST-free export items include:

  • Physical goods exported to overseas customers
  • Services performed for customers located outside Australia
  • International freight and logistics services
  • Software and digital products supplied to international clients

Handling Foreign Currency Transactions

If your business receives payments in foreign currencies, you must convert the amounts to Australian dollars (AUD) for reporting purposes. The ATO allows you to use the exchange rate on the day of the transaction or a specific rate determined by your accounting software provider.

Be sure to record:

  • The foreign currency amount received
  • The applicable exchange rate
  • The AUD equivalent for financial reporting and GST calculations

Export Documentation and Record-Keeping

Maintaining accurate records is crucial for businesses involved in exporting goods and services. Ensure you keep the following documents for at least five years:

  • Invoices and shipping documents for export sales
  • Customs declarations and export permits
  • Proof of payment, including bank statements and remittance advices
  • Exchange rate records for foreign currency transactions

Tax Implications for Exporting Services

While most goods exported from Australia are GST-free, some services may be subject to GST. Ensure that you verify the GST treatment of exported services, particularly when dealing with digital products, intellectual property, or consulting services provided to overseas clients.

Need Help Managing Export Transactions?

Exporting goods and services adds a layer of complexity to bookkeeping and tax reporting. At Northern Beaches Bookkeeping Solutions, we assist businesses with accurate record-keeping, GST management, and financial reporting for export transactions. Contact us today to ensure your business remains compliant and financially organised.

Posts by Coralie Downie
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