Regulation Impact Statement Updates

Official website for publishing regulatory impact analysis information for regulatory decisions announced by the Australian Government, COAG and COAG Councils.

Single touch payroll for small business employers

Aust Gov
18th January 2019

Regulation Impact Statement – Department of the Treasury

On 28 March 2018, the Government introduced legislation to extend Single Touch Payroll reporting to all employers.

The measure requires small businesses with fewer than 20 employees to use Single Touch Payroll (STP) enabled software to provide digital real-time reporting of their Pay-As-You-Go Withholding tax obligations and superannuation guarantee (SG) contributions to the Australian Taxation Office. The obligation already applies to businesses with 20 or more employees. At the time of analysis only around 40 per cent of small businesses were identified to use payroll software, so many would face up-front costs in adopting new payroll solutions. However, most small businesses are expected to benefit from lower ongoing compliance costs in meeting their reporting obligations. Benefits are also expected for the broader community through improvements in the integrity of the tax and SG systems, as small businesses are identified to be responsible for a significant proportion of non-compliance.

The Treasury prepared a Regulation Impact Statement (RIS), which was assessed by the Office of Best Practice Regulation (OBPR) as compliant and best practice under the Government’s RIS requirements.

The RIS estimates average regulatory cost savings for businesses at $176 million a year. The OBPR has agreed to this estimate.

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