Phase 2 of Single Touch payroll is coming and this is what it means for you.
STP 2 begins officially from 1 January 2022, and there will be more reporting information required by the ATO each time you process a pay run.
Phase 1 has included the reporting of an employee's tax and super information to the ATO. STP Phase 2 will expand and capture more information to the ATO. It will also help employers who need to report information about their employees to multiple government agencies. It can also help your Services Australia employees get the right payments at the right time.
A few of the main areas that Phase 2 will now capture include:
- Tax File Number Declarations - No longer need to be sent to the ATO. This information will be included in your STP filing. You will still need to retain the declaration with your employee's records.
- Termination reasons - Such as voluntary or a redundancy. This will mean no more separation certificates.
- Employment basis - This is now a mandatory field for reporting.
- Disaggregation of Gross - Currently STP reporting includes a total gross amount for all payment types. This will now be broken down into more detail such as gross, paid leave, allowances, overtime, bonuses and commissions, directors' fees, Lump Sum amounts and salary sacrifice.
STP Phase 2 will not change the way you currently submit to the ATO. The way you lodge, the due date and end of year finalisation requirements will all stay the same.
Your payroll software provider will update their STP-enabled software to offer Phase 2 reporting. When your STP-enabled solution is ready, they will let you know what you need to do.
However, if you are using Xero for your payroll there is a 12 month deferral in place until 31 December 2022. Which means Xero users do not need to do anything right now.
If you require any assistance please reach out to the C&N team.
