To make sure that the government earns as much revenue as possible to help them pay for services and infrastructure, the tax authority maintains a comprehensive code. This is hundreds of pages long and may be difficult for the average person to comprehend but, nonetheless, a small business owner has to make sure that they comply and gather the appropriate taxes as needed. If you are a long-suffering small business owner, you may think that you have got all this under control, but every now and again, the ATO will move the goalposts. In this case, they've introduced something known as single-touch payroll to help spice up your life. So what is involved in this?
The concept of a single-touch payroll was introduced by the government during 2019 and relates to superannuation and employee payments. This was phased in by the Australian tax office because it represented a significant change, but by this time, you should be in compliance with their expectations. However, if you have a very small business with fewer than five employees, then you may not need to worry about it. If that's not the case, you should certainly pay attention.
As you know, you have to withhold tax from all your employees on a weekly or monthly basis, and you need to deduct superannuation payments from most of them as well. In the past, these would be reported at some stage in the future, but now, you have to let the ATO know as soon as the event takes place. In order for this to happen, you will need a payroll solution online that will be directly connected to the tax office and transfer the details as needed.
One of the advantages of this new system is its ability to display up-to-date information on request through a special portal. Consequently, employees can now look at their tax information and superannuation payments online as the year is progressing to make sure that they are happy with all the calculations.
Time to Outsource
If you're like many small business owners, you may have tried to handle all of your payroll affairs yourself. However, this new process may be difficult for you to comprehend or you may not be particularly astute when it comes to dealing with digital requirements. In this case, you should outsource everything to a payroll management agency so that all your information is up-to-date and transferred in accordance with the new laws.