By now most business owners will have become used to Single Touch Payroll. As we head into the New Year, it is important to stay up to date with the growing requirements of running your own business. One such requirement is the expansion to the STP program – STP Phase 2.
What is Phase 2
Phase 2 expands the reporting program to capture more payroll information. The idea is that it will reduce the compliance burden for employers who need to report payroll information to multiple government agencies. This, in turn, will also help individuals when accessing social support services, such as Centrelink.
What does Phase 2 kick-off?
The official start date for STP Phase 2 reporting is 1 January 2022. If you are with Xero, they have secured a 12-month deferral for all partners until 31 December 2022, so there is nothing you need to urgently attend to and can make a start on Phase 2 when the time is right for you in 2022.
What the new payroll information is included?
- Tax File Number declaration – details typically founds in the TFN declaration form will be included in the STP Report submitted to the ATO, meaning declaration forms no longer need to be sent to the ATO.
- Termination reason
- Employment basis
- Income Types – in Phase 1, all types of income (allowances, bonuses, overtime, paid leave, etc.) were includes as ‘gross income’ when reported via STP. Under Phase 2, employers will need to separately report these income types.
How can I make the move to Phase 2?
Xero, and other software providers, are currently working closely with the ATO to upgrade their software and ensure all necessary STP Phase 2 information is captured and submitted to the ATO. Once these solutions are ready, we will communicate with you as early as possible to ensure that you are prepared to make the transition.
You can learn more about Phase 2 here: https://www.ato.gov.au/Business/Single-Touch-Payroll/Expanding-Single-Touch-Payroll-(Phase-2)/
Otherwise, please don’t hesitate to contact our office with any questions