The Australian Taxation Office has recently advised that it is in the process of shifting from its previous engagement and communication focus on Single Touch Payroll (STP). This means that if your small business is yet to be STP compliant, they may be shifting their gaze to you.

In particular, the ATO will begin a ‘failure to lodge penalty’ process for small business employers (that is, those with 19 or fewer employers) who have yet to commence STP reporting.

STP reporting has been mandatory for most small employers from the 2020 income year, with the final ‘nudge letter’ being issued to approximately 700 small employers in late January 2022.

Notably, the ATO has advised that any remaining non-compliant small employers (i.e, those not subject to any appropriate reporting extensions or exemptions) will have pre-penalty warning letters issued from 18 February 2022.

Where an employer receives a pre-prenalty warning letter, they will have a further 28 days to take action by either starting to lodge or contacting the ATO before a failure to lodge penalty will be imposed.

If you are yet to start lodging your STP, use this fact sheet to get you started.