AI Leads To A New Era Of Single Touch Payroll Solutions
Artificial intelligence (AI) is paving the way for a whole new era of single touch payroll solutions. Here's how it's happening.
Artificial intelligence is changing the nature of payroll. According to Accounting Today, AI is starting to merge many traditional accounting and payroll functions, which will simplify a lot of business processes. One of the biggest examples is with the advent of Single Touch Payroll.
Single Touch Payroll is the Biggest Breakthrough in AI Driven Accounting Solutions
Every time an established process or formula is changed, it’s usually met with a little bit of uncertainty. Those responsible parties will typically defend the previous approach, which is why it’s crucial to understand just what the change is, and how that will impact your team and business.
Single Touch Payroll was introduced in 2018, with all businesses instructed to be compliant with the new system. With a compulsory change that doesn’t discriminate on business type, many are still getting into the new groove of doing things. Fortunately, the Single Touch Payroll process offers nothing but benefits for any business, but there will be changes. Let’s unpack how these changes may impact your business.
There are a number of ways that AI and other big data technology are intertwined with Single Touch Payroll. SAP has discussed the role of cloud computing in this new field, while AI is going to affect it in other ways.
What is Single Touch Payroll (STP)?
Single Touch Payroll requires businesses to report payroll in real-time, so that records are always current and employees can understand their exact tax and super contributions at any given time. Salaries, wages and pay as you go (PAYG) statements will also be communicated to the ATO throughout the year automatically as you pay your employees. Gone are the days of the EOFY pressures and run around, with Single Touch Payroll keeping current and accurate accounts of employee contributions at all times and available for employees to view. It uses sophisticated big data technology to accomplish these functions.
Modernization of the accounting system
Big data technology has changed the future of accounting in a number of ways. If you had previously identified your payroll system as a collection of spreadsheets, or worse – hardcopy formats, then you will likely be feeling the effects more so than those businesses already plugged into modern software. Single Touch Payroll requires businesses to have a modern payroll system to facilitate ongoing reporting compliance. While a simple change for a large business, this could be a huge undertaking for smaller operations who have likely managed on a simple payroll procedure. This is why the ATO has outlined recommended payroll systems for businesses to adopt. Whether you are introducing an entirely new system or upgrading your existing one, be sure to go with a reputable provider to ensure timely and compliant reporting.
No more payment summaries
The introduction of Single Touch Payroll has voided the need for payment summaries, with employers reporting salaries and wages throughout the year. This means that you and your employers can complete tax at the end of June without having to wait for a payment summary to arrive in the letterbox. MyGov will now hold all the information required for employees to complete tax or simply check on their contributions. Small businesses will also go through the change of completing a pre-filled Business Activity Statement (BAS), either once, twice or quarterly throughout the year. Larger PAYG withholders will not have to report their PAYG through this activity statement.
Your business size will determine the changes
While all businesses will feel some impact, there is a variation based on the size of your business and the employment types you hold. For businesses with more than 20 employees, changing over to Single Touch Payroll happened in 2018, with business holding less than 20 employees making the change in 2019. This headcount does not only include FTE’s but also your casuals, although be sure to count against the ATO STP head count instructions.
At the end of each business year, we are often left reflecting on the changes we have seen. This is mirrored by the ATO recognizing that there is a simpler, and more accessible, way of reporting payroll with Single Touch Payroll created. If you require further information about what it entails and how that impacts your unique business, reach out to a payroll software provider and understand the changes you need to make.
Big Data Made Single Touch Payroll Possible
There are a number of benefits of Single Touch Payroll. Artificial intelligence is at the core of this innovative new technology.
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