In the 2019–20 Budget, the Government announced that Single Touch Payroll (STP) would be expanded to include additional information.
The expansion of STP, also known as STP Phase 2, will reduce reporting burden for employers who need to report information about their employees to multiple government agencies. It will also help Services Australia’s customers, who may be your employees, get the right payment at the right time.
The mandatory start date for Phase 2 reporting is 1 January 2022.
Mandatory STP Phase 2 reporting is now set to commence 1st January 2022, as the government looks to reduce the reporting burden for employers who are currently required to provide employee information to multiple government agencies.
The expansion of STP will see additional information required to be reported each payday, building on basic salaries and wages information reported through the original STP regime that first began in 2018.
The Tax Office has now released a fact sheet for employers, noting that STP reports will soon need to separately itemise the components which make up the gross amount, including bonuses and commissions, directors fees, paid leave, salary sacrifice, overtime, allowances and gross (other).
Employers will also need to report whether an employee is on a full-time, part-time or casual employment basis, the tax treatment for PAYG purposes, and the reason for separation when employees leave.
Income types and country codes will also need to be reported to make it easier for employees to complete their individual income tax returns.
Salary-sacrificed amounts will also need to be included in an STP report, while lump-sum payments will be broken down into two different categories.
Employers will also be able to provide the ATO with previous Business Management Software IDs and Payroll IDs where there has been a change in software or business structure to allow the Tax Office to fix issues with duplicate income statements for employees in ATO online.
Hopefully your payroll software has now been updated and if you have staff that have different categories in their payroll, normal hours, overtime, allowances etc, you should check to see whether you are allocating these pay items in the write box.
“It’s important to remember that all STP-enabled solutions have different functions and updates for the expansion will be offered in different ways,” the ATO said.
“What you need to do to set up will depend on what product you use and how you manage your payroll.”
The ATO has revealed that employers that begin reporting additional payroll information required under STP Phase 2 by 1 March 2022 will be considered to have met its 1st January deadline.
“Where an employer’s payroll solution is ready and they can start reporting from 1 January 2022, the ATO will support and encourage them to do so.
“Employers whose payroll solution is ready for 1 January 2022 will be considered to be reporting on time provided they start Phase 2 reporting before 1 March 2022. They will not need to apply to the ATO for more time.”
providers that need more time. Customers of these software providers will automatically be covered by that deferral.
The latest information from the ATO is here. Employer STP Phase 2 checklist is here
The ATO has also made some webinars. You can review these here
Where are MYOB and Xero up to with software development for STP2
MYOB Users – click here
Xero Users – click here
