The ATO will introduce single touch payroll reporting (STPR) in July 2018, with companies given the option to volunteer to take part from 1 July 2017.
BDO tax partner Jason Daniels said STPR will improve cash flow management for businesses.
“Single Touch Payroll means employers will be able to report [to the ATO] payroll information like pay-as-you-go (PAYG) tax and superannuation at the same time as they pay their employees,” said Mr Daniels.
“Many businesses will find that this will help with real-time cash flow management and reduce the burden of specifically reporting and paying large sums each quarter.”
The new system means that it will become much harder for companies to avoid making accurate superannuation payments to employees, as the ATO will receive the information in real time.
The ATO will then have the ability to match what is reported by the company with data provided by the super funds for actual contributions made.
Mr Daniels is urging employers to use the next 12 months to get their payroll reporting in order before it becomes mandatory.
“Much like we saw businesses improve their accounting systems to adapt to the introduction of the GST back in 2000, organisations should review their payroll procedure to take advantage of the efficiencies offered by digital reporting,” he said.
- Is superannuation still a good option for your clients?
By Chris Morcom
- Practical advice for improving your cyber security
By Rob McAdam, Pure Hacking
- Blockchain: why it’s time for accountants to get on board
By Ben Scull, Thomson Reuters