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Xero Blog - Announcing an STP solution for the smallest employers

If you’ve been following the news, you may know that all employers use Single Touch Payroll starting in July.  Even micro-businesses – those with one to four staff – are required to electronically lodge every pay run with the ATO.

We asked our smallest business subscribers, as well as our bookkeeping and accounting partners, how they felt about this change.  A consistent response came through: micro-businesses want to use Xero Payroll for Single Touch Payroll (STP) but some aren’t quite ready to adopt a full accounting-software package.

For that reason, we’re delighted to announce two standalone solutions that will ensure the 400,000 micro-businesses about to fall under the new STP rules remain compliant:

  • A new Payroll-only product for as many as four employees, with an expected price of about $10 a month
  • The option for Xero partners to add Payroll to a ledger or GST cashbook subscription covering up to four employees (price to be determined).

It’s the first time Xero have offered Payroll as a standalone product, and they plan on delivering both solutions by 1 July 2019.  Both options will feature the full Payroll module, offering the ability to process, pay and report information for up to four employees.

Most bookkeeping and accounting firms agree that this will be a big help to their smallest clients.  They will get a solution for STP and also they will get their first sense of what Xero can do for their business.

Helping the smallest businesses make the shift

Many smaller businesses use some combination of spreadsheets, ATO paper tax tables, Post-it notes and shoeboxes of paperwork to process payroll.  In fact, some 90,000 micro-businesses use no software at all, according to the ATO.

We see hundreds of thousands of small businesses are going to need help with this digital move.

In addition to the new product for micro-businesses, employers of any size on a Xero plan with Payroll enabled can now opt in to STP.  For many employers making the shift, this could be the catalyst to understanding how simple, beautiful and connected solutions reduce friction in their business.

It's still early days with this product announcement.  We will keep you posted.

Check any updates on Xero.