The Government has been called on to release a cost benefit analysis to support its announcement that small businesses will have to use Single Touch Payroll.
The Government announced this week that small businesses (with 19 or fewer employees) would have to use Single Touch Payroll from 1 July 2019, as part of a crackdown on Superannuation Guarantee non-compliance.
Single Touch Payroll (STP) was previously only going to be compulsory for large employers from 1 July 2018. STP will involve reporting PAYGW and superannuation data to the ATO as part of payroll processing.
The Institute of Public Accountants (IPA) has called for the release of a cost benefit analysis of the impact of requiring small businesses to use Single Touch Payroll.
“We support the objectives behind STP and the increased transparency and visibility it provides,” said IPA CEO Andrew Conway.
“For larger employers, the compliance costs associated with STP can be streamlined within their existing processes with minimal additional compliance costs; this is not the case for small or micro-employers,” he said.
“The IPA advocated for the government to draw a line in the sand to stop mandatory reporting for smaller employers, pending a full cost benefit analysis.”
“The Government conducted a pilot program and we have been waiting for the results to prove the cost benefit analysis of introducing the program, especially in relation to how it impacts SMEs.”
“Comments that infer that STP will reduce the regulatory burden are misguided. Small businesses already face considerable compliance issues; STP will just add to the load with mandatory pay-period based reporting.”
Mr Conway said the IPA was keen to see the details of incentives the Government will provide to small business to transition to STP, given the digitisation of processes could be a “financial outlay which many may struggle to meet”.
Though requiring small businesses to use Single Touch Payroll has received support from the superannuation industry. Australian Institute of Superannuation Trustees (AIST) CEO Eva Scheerlinck said it was a critical reform to address unpaid Super Guarantee.
“The problem of non-compliance with super payments is most acute among small business so encouraging all employers to take up electronic payment systems is a significant step in tackling unpaid super, as well as the black economy,” said Ms Scheerlinck.