Employers will face penalties for missed or late reports as outlined by ATO. New penalties would be applied for the first 12 months of STP (single touch payroll). This took effect for larger companies on July 1st, 2018. It’s just now been rolled out to smaller companies that have 19 employees or less taking effect from July 1st, 2019.
According to publication ‘Accountants Daily’ over 107,000 small businesses have reported through STP as of June 30th, 2019. The 12-month waiver on penalties is over for larger companies. The tax office has given clarification about what the penalties will look like and how these penalties are to be applied.
For missed or late STP reports, the ATO will generally apply the penalties if the employer is repeatedly and routinely late. When single touch payroll reports are overdue, there will be a penalty at a rate of $210 for every 28 days or part thereof. The maximum for this penalty will be $1,050.
For medium companies, the penalty maximum will be $2,100. For large companies, it will be $5,250. For large global corporations, it will be a maximum of $525,000. The penalties will only be applied when the employer has not rectified errors within a reasonable time frame, according to the ATO.
Under to STP law, the commissioner can provide a grace period for an employer to correct mistakes without penalty. If an employer knowingly reports information that is incorrect or doesn’t correct this information within a period of around 14 days, penalties will be applied. The same applies to misleading or false reports.
This clarification of penalties comes from revelations that thousands of companies and even government agencies we’re not starting their STP reporting ahead of the June 30th deadline. A spokesman for the tax office indicates that they are focusing on assistant small business owners so that they become STP compliant. Those that have made mistakes will not face penalties for the next 12 months. This will give them time to become compliant.
Small business owners are required by law to start reporting superannuation and payroll information through the STP system starting Monday, July 1st, 2019. There is a 3-month grace period that goes to the 30th of September,2019. For companies where employees are immediate family members, there is a 12-month waiver to 1 July 2020.
Accountants indicate that while there is a grace period, companies should start reporting as soon as they can. You don’t want to leave it until the last minute or try to do it in a haphazard fashion.
Chan & Naylor Accountants Capalaba can help you comply with the new rules in a time and cost effective way. For a limited time we are offering 6 month free Xero to help you comply and we’ll throw in free file set up and training videos to get you started, valued at over $590. Unlike bookkeepers, our goal is to teach business owners to process their own file sand keep bookkeeping accurate and costs low.