First, a message from Team MGAA. Despite a lockdown in Greater Sydney, your team at MGAA will continue to function onsite and/or from home to ensure seamless service during these testing times.
Now let's talk about STP. As a closely held small business, your business has been paying salary to you and your family members without having the cumbersome requirement of lodging an STP report. From 1st July 2021, this exclusion will no longer be applicable. Hence your business will need to lodge an STP report for each pay cycle, most likely once a month.
- A payslip needs to be issued for every pay run through an STP compliant software
- An STP lodgment needs to be done. Once set up correctly, this is usually a press of a button, after a payslip is generated.
What are we doing to help you comply?
- Prior to, or soon after 30th June, we will upgrade your current MYOB/Xero software to a level which allows us to process payslips and lodge STP
- In discussion with you, we will then set up template payslips for all closely held employees (you and your family members who work in the business)
- Each month we will then process your payslip, and at the same time lodge STP report with ATO.
- Making use of software functionality, we will also set up and process your super on a monthly or quarter basis, making it easier for you to pay.
If you are a Xero subscriber,
- You currently pay between $19 to $39 per month (after passing on to you 25% discount on regular plans that we get from Xero as a Gold Partner). This will go up to $67pm*. Additionally Xero is offering a 50% discount on the subscription for 6 months ($33.50pm for 6 months). Post this we will be able to avail a 25% discount for you as a Xero Gold Partner.
- The good news is, with this upgrade you will get FREE access to HUBDOC, a Xero product which will help you electronically save documents and receipts for tax records, making it easy for you to comply with substantiation requirements. This software otherwise costs $20 per month.
If you are a MYOB subscriber,
- You currently pay between $40 to $50 per month. This will go up to $60*. Additionally we will get a 50% discount on the subscription for 3 months ($30pm for 3 months).
- We can also set up a HUBDOC subscription for you at an additional cost of $20 per month. Hubdoc is a Xero product which will help you electronically save documents and receipts for tax records, making it easy for you to comply with substantiation requirements.
- You may also wish to move to Xero from MYOB, an option that can be discussed and implemented.
* Promotional prices and subscription costs are subject to Xero and MYOB terms and conditions.
- For initial set up of both the payroll file and Hubdoc, including training you on using Hubdoc is expected to be a nominal on off fee of $120+GST.
- Ongoing costs are minimal, estimated at $15 per month per business entity.
What should you do?
At this stage, nothing. As your accountants we will take care of this transition seamlessly.
However, if you wish to not step into STP, we can discuss options, including converting your salary to trust distributions instead. Recent experience has shown that most if not all, of government incentives (including Jobkeeper and Cash Flow Boost) were made available only to businesses who paid salary to employees (including owners of a business). Accordingly, please weigh your options and feel free to discuss with us.
Should you have any questions or concerns, please do not hesitate to contact us at your earliest.