STP will roll out for employers with 20 or more employees on 1 July 2018, while employers with 19 or less employees will have to start reporting on 1 July 2019.
The project is similar in scale to SuperStream. Several extensions were granted during the SuperStream rollout after the industry struggled to be ready by deadline.
Similar struggles are facing accountants and software providers with STP, but there will be no mass deferral of start dates.
“The date is set for STP for large employers, and it’s 1 July 2018. That won’t shift, that is the date they need to start reporting by,” STP program lead at the Australian Tax Office (ATO), John Shepherd, told Accountants Daily.
There is a process for deferrals in place, which individual businesses can and have applied for. You can read more about the deferrals process here.
“In other words, there won’t be blanket extensions. It’ll be done on a case-by-case basis,” Mr Shepherd said.
Partner at BDO, Matt Laming, is one of several mid-tier executives who has told Accountants Daily that rumours of an extension are spreading in accounting circles.
“We’ve heard similar rumours and speculation, and like Superstream, deferred or not, STP will happen and we’re preparing our clients to adopt best practice. We have not seen any change to the adoption date so we are focusing on ensuring our clients are ready,” Mr Laming said.
The ATO is set to contact 150,000 employers, both through letters and e-mail, to remind them of their obligations and the upcoming deadlines.
The ATO is satisfied with the progress of software developers in getting STP-ready. However, at this stage, only five of an approximate 140 developers that have registered interest with the ATO about providing STP products are ready to go.
As it stands, 22 software providers supply payroll products to around 80 per cent of Australian employers with 20 or more employees.
“The vast majority of these 22 payroll software providers are currently indicating they will have [an] STP product ready by 1 July 2018, although there is flexibility available for those that may need more time,” an ATO spokesperson told Accountants Daily.
“It’s a big change. Payroll is a complex thing, particularly for large employers,” Mr Shepherd said.
“We are going to have a long transition period here, that was quite deliberate,” he said.
“We are starting to get a few more solutions testing and coming on board, and a few more employers starting to report to us. We have learnt a lot from that, which has been great,” Mr Shepherd said.
During the first 12 months, those required to report will be exempt from an administrative penalty for failing to report on time. There are exceptions where the tax office has given written notice advising of a failure to report on time.
Many software providers have bemoaned a lack of ATO guidance about the specifications necessary to create an STP product. Major providers, such as MYOB, have applied for or are mulling deferred start dates.
“Many software providers have committed to being ready but have long awaited the necessary development specifications from the ATO – so it’s not surprising that, today, some of them are not ready,” Mr Laming said.
Guidance from the ATO for software developers was finalised in December last year.