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I hate Single Touch Payroll for not for profit organisations…

Here is the letter I wrote today to the Treasurer explaining why…

Dear Minister,

On 6 February the Commissioner of Taxation announced that, starting 1 July 2021, not-for-profit clubs or associations (for example, school parent associations or local sporting clubs) will need to report under single touch payroll per pay event rather than quarterly.

Many of these organisations pay small amounts to employees for say running a canteen weekly, and this change means that, rather than having to report these amounts quarterly to the Commissioner (i.e. four times a year), they will now be required to report these amounts 52 times a year.

For example, to help the only part time employee of the Curtin Primary School Canteen manage her finances and budget, the P&C has agreed with he to pay her a weekly amount, even in the weeks that the school and the school canteen is not run. This is the same amount each week as it is her annual salary divided by 52. The payment is done by an automated weekly payment so there is no need for payroll software and once a quarter the total paid, super paid and PAYG Withheld for the quarter was reported and paid. There is no need to pay a BAS or Tax Agent to do this as it is very simple and not time consuming.

Well it was simple but from 1 July 2021 it will become ridiculous. Under this change, every week (even during the holidays) a volunteer from the P&C will need to log into single touch payroll software and lodge a report for that week. Every report for the entire year will be exactly the same. So, instead of reporting 4 times, these volunteers now need to report 52 times a year.

When you ask the ATO to respond to this they will say that “if these employers have exceptional circumstances and can’t report each pay day, they may be eligible for the quarterly reporting concession for micro employers.” What they will not say is that to be eligible for this concession the employers has to “lodge your activity statements electronically through a registered tax or BAS agent” and there have to be exceptional circumstances. To pay a BAS agent or tax agent for this is just a waste of money that could be used to pay for meals for kids that don’t come to school with lunch, but even if these employers did pay for a BAS agent to lodge their BAS, there are no “exceptional circumstances according to PS LA 2011/15.

Asking a volunteer of a not for profit to lodge 52 documents a year each with the same information on it is ridiculous and the Commissioner should continue to allow these not for profits to report quarterly.

By Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.

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