Wednesday, 10 April 2019 12:18

Xero offers payroll-only plan

By
Xero Australia managing director Trent Innes Xero Australia managing director Trent Innes Stephen Withers

Xero has responded to the Federal Government's expansion of Single Touch Payroll reporting by introducing a payroll-only plan.

STP reporting was introduced last year, requiring businesses with 20 or more employees to electronically lodge salaries and wages, PAYG withholding and superannuation reports at the time of a pay run.

Legislation extending the scheme to all employers was passed in February, with an implementation date of 1 July.

Small employers will be considered compliant provided they start using STP by 30 September.

This can be achieved by using STP-compliant accounting or payroll software, by engaging an accountant or tax agent to report on behalf of the business, or by using a reporting portal.

Accounting software providers have noted that some of their smaller customers are already reporting via STP even though it is not yet mandatory for them to do so.

One group that will be particularly affected by the change is the large number of contractors, freelancers, etc that have chosen to incorporate and are the only employee of the company that they own.

At the time of the announcement that STP was being broadened, ATO assistant commissioner John Shepherd said a number of low cost (ie, less than $10 a month) reporting options would become available during the current financial year.

Xero's new payroll-only plan costs $10 a month.

It provides payroll for up to four employees, giving the new plan an addressable market of 400,000 small businesses, according to ATO figures.

The plan includes full payroll facilities, including timesheets and leave requests, support for the XeroMe mobile app for Android and iOS (allowing employees to submit timesheets and view their payslips, etc), and activity statement calculation.

Users can choose to upgrade to a Xero accounting plan that includes invoices, bills. bank reconciliation and so on. Prices start at $25 a month, which includes payroll for one person (typically the owner-employee).

For five or more employees, the business would need a premium plan, which starts at $65 a month.

"We're pleased to offer a digital payroll reporting solution supporting Australia's smallest employers – many of whom are used to manually reporting payroll activity to the ATO," said Xero Australia managing director Trent Innes.

"The government's introduction of real-time digital payroll reporting for all Australian businesses is a step towards levelling the playing field for small business owners of all sizes. Xero's data shows digital integration is associated with better outcomes for small businesses — including increased revenue — so this change is hugely positive for the sector.

"We want to help small business owners — no matter where they are in their journey — understand that digitising and automating their backend processes can provide a significant competitive advantage. Our Payroll Only plan is designed to make it as effortless as possible for small business owners to make the transition. The beauty of Xero's cloud-based platform is that it can then grow with small businesses as their needs change and mature."

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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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