You can’t fight it: Single Touch Payroll prompts hotel industry shake-up
Do you have your new Single Touch Payroll system sorted out and running smoothly?
No doubt, there were plenty of people in our industry who weren’t exactly thrilled at the prospect of yet another regulation to adhere to as of 1 July 2019. Single Touch Payroll (or STP) is a significant change, especially if your business isn’t already computerised, and it’s prompting an industry shake up.
Every hotel owner needs to feel peace of mind about their payroll. So, here are some frequently asked questions and answers about STP. You’ll especially benefit from these if you’re in the process of adopting new technology into your business, or feeling unsure about the new rules.
What are the new rules?
- If you have 20 or more employees, you should already be using STP.
- If you have 19 or less employees, your official start date is 30 September 2019.
- If you have four or less employees, you’re allowed to use a registered tax agent to send your information online quarterly (rather than every payroll) for the first two years.
Exactly what is Single Touch Payroll?
It is using a software package within your business to record your payroll and then submitting this information electronically to the Australian Tax Office (ATO) showing your total wages, PAYG withholding and superannuation that was earned by employees every time you process the payroll. Instead of matching payments once a year, the ATO now does it in real time.
Is it true the introduction of STP is prompting some to exit the industry?
Yes, it is. At DFK Crosbie, we advise and provide business services to more than 250 hotel clients across New South Wales. I know of several hoteliers and external payroll providers who’ve decided it might be time to pull the pin and retire, rather than learn a whole new way of doing things.
We need to acknowledge that for someone who’s been running their business the same way for a very long time, this is a huge change. Just say a business owner has been running their hotel for decades and simply prefers to do the books manually. . Maybe there wasn’t any reason to use a computerised payroll system — until now.
How tricky is it to use STP?
Once your accountant or adviser helps you set up your new process, I suspect you may find it’s not as onerous as you feared. However, if you’re adamant you don’t want to invest the money or time on the new technology, there are alternatives.
So, what are the alternatives?
If you want to continue doing your payroll manually, there’s no choice but to use an external provider to comply with STP reporting. From here you have a couple of options:
- You can outsource your payroll completely, which many successful hotel operators choose to do regardless to free up their time. Companies such as DFK Crosbie specialise in a variety of business services for hotel owners, including payroll, stock control and bookkeeping.
- You could use a simple ‘send it on’ system where you continue to enter your data manually then send it to your accountant or service provider, who can upload it to the ATO on your behalf as a registered tax agent.
Are there any benefits for businesses like mine?
Absolutely. From a business owner’s perspective, the upside to the new system is the time you’ll save once your new process is embedded. This is especially the case if you haven’t used computers until now. Whether you invest in the technology yourself or outsource your payroll to an external provider, the time you once spent on payroll is now free to focus on running your business and boosting profits — or to spend with your family. That’s peace of mind right there.
If you are already using a software package for your payroll than it most likely it has the capability to be STP compliant and you just need to be shown how. This is a service we are providing to our clients to ensure they meet the ATO deadline.
Do I have a choice?
Unfortunately, no. The ATO has already pushed the introduction dates for STP back a couple of times. As an industry, we need to accept that it’s happening and get on with it. Yes, it’s an industry shake up — but it’s also an opportunity to make sure you have peace of mind when it comes to your payroll.
By Jason Butler - Jason Butler is a Partner at leading accountants and business advisers DFK Crosbie, and has specialised as a strategic adviser to hotel owners for the past 20 years.
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