I like to give school students and people that struggle to get employment the experience of working in my "micro-business". However, the ATO insists that to employ anybody, we must use 3rd-party STP software. There are some STP providers that offer free software for up to 3 employees, but charge for any additional employee, even a school kid that works one day in the year. Surely as a willing Australian business, I should be encouraged to employ as many people as possible, and employ them under the law with the full coverage of workers' compensation, Superannuation Guarantee (SG) etc. The ATO compliance costs of running my business is increasingly killing it because the free software is poor quality and the expensive software is just that - expensive. Australian businesses should be able to directly report to OUR "tax man", not be the fodder for, particularly, overseas software developers. The ATO needs to recognise that a successful and worthwhile business can, and should, be able to use a paper ledger book. ATO reps, please advise how to report STP, SG directly to the ATO like is done with the BAS.
477 views
4 replies
Hiya @PedroPete ๐
Good on you for hiring young workers so they can gain experience ๐
STP was designed to align with the existing payroll business processes, as there are many Fair Work and LSL obligations for Australian employers that are best managed via payroll software. STP was designed to be just another step in the pay process. Just as for SuperStream, there is a report that is designed to be a step in that employment process to pay third parties.
It's different from the BAS, as there are many aspects of financial business operation that are represented, that may comprise data from different aspects/systems and processes in the business.
There certainly are full functioning payroll products that are free for fewer than four employees with modest fees for more. Those products must ensure they deliver all of those Fair Work obligations and are able to meet the 7 year record keeping obligations defined in the Fair Work Regulations 2009. Great tools to ensure you meet those Fair Work obligations.
Similar to accounting software, payroll does come at a cost to keep up with legislative changes.
Deanne
All replies
Hiya @PedroPete ๐
Good on you for hiring young workers so they can gain experience ๐
STP was designed to align with the existing payroll business processes, as there are many Fair Work and LSL obligations for Australian employers that are best managed via payroll software. STP was designed to be just another step in the pay process. Just as for SuperStream, there is a report that is designed to be a step in that employment process to pay third parties.
It's different from the BAS, as there are many aspects of financial business operation that are represented, that may comprise data from different aspects/systems and processes in the business.
There certainly are full functioning payroll products that are free for fewer than four employees with modest fees for more. Those products must ensure they deliver all of those Fair Work obligations and are able to meet the 7 year record keeping obligations defined in the Fair Work Regulations 2009. Great tools to ensure you meet those Fair Work obligations.
Similar to accounting software, payroll does come at a cost to keep up with legislative changes.
Deanne
Thank you for the response, but, with respect, I strongly disagree.
The STP software we have been using has made multiple errors; including errors which have underpaid SG. We picked this up because we have a knowledge of what our obligations are as an employer and use a separate 'ledger' not linked to the STP software.
The fundamentals of Fairwork and LSL requirements need to be known by any employer, not for them to simply rely on software and trust in the back-end updates of this software, which is not efficient or fair.
Businesses should not need to have accounting software. Last year my business generated only 14 invoices, yet we employed 10 people at different times. We've been in business for more than 25 years and the significant majority of our income is from exports. We are an Australian manufacturing success story.
To me, after decades in business, the software obligations are causing more headaches which is discouraging taking on employees.
A business in Australia needs to be encouraged by the ATO to remain in business, not die through having to deal with 3rd-party software companies.
My experience with the ATO has always been positive, but this payroll and STP processes are unproductive and to me, being driven by people that do not understand small business and encourage non-compliance through poor software and promotion of apathy in employers.
A Xero license for a small business with 2 employees is more than $1000+ per year. That is a serious hit for small businesses, and Xero is raking it in with these mandates to use software like theirs.
If there are free software list them please, as I have tried them and none seem to be working.
[removed by moderator]/ just says the tenant is not active after going through the hassle to register. They all seem to be broken in some way.
Featured articles
15 Apr 2026 ยท 4 min read time
16 July 2025 ยท 5 min read time