STP Phase 2

Phase 2 of Single Touch Payroll is set to come into place 1 January 2022. It’s aim is to reduce the burden employers may experience when needing to report information about employees to various government agencies like Services Australia.

What are the benefits of STP Phase 2?
For employers

  • TFN declarations will no longer have to be sent to the ATO, they are still to be provided by all employees and kept with their employee records

  • You will now be able to let the ATO know you are using a concessional reporting option through the reporting income types

  • You will no longer have to provide Lump Sum E letter to employees

  • STP Phase 2 will also be able to share payroll information with Services Australia in near real-time

  • You may no longer need to provide separation certificates when employees leave, this information should be in your STP report

For employees

  • Tax time will be easier as the ATO will have a more accurate breakdown of the types of income received from an employer

What changes will be happening and what remains the same?
While there will be some changes with additional information needed in your STP report the following will remain the same:

  • The way you lodge

  • The due dates

  • The types of payments that are needed

  • Tax and superannuation obligations

  • End of year finalisation requirements

A lot of the additional information that is required in the STP report should already be done in your current payroll software. The key changes include:

  • Separation of different gross income types – you will no longer report a single gross amount it will be separated into each income type

  • Employment and taxation conditions

  • Income types

  • Country codes

  • Child support garnishees and Child support deductions

  • Reporting previous Business Management Software IDs and Payroll IDs

For more information about STP Phase 2 visit the ATO.

MYOB
To ensure that all users are reporting their STP Phase 2 correctly users will be prompted to correct or add any items that do not meet the new requirements. For more information on STP Phase 2 and MYOB visit their website.

XERO
The official start date for STP Phase two will be 1 January 2022, however all Xero clients will have until 31 December 2022 to report their first STP phase 2 pay run. For more information on STP Phase 2 and Xero visit their website.

Paul AbercrombieAbercrombie Accounting Group