In the 2019–20 Budget, the Government announced that Single Touch Payroll (STP) would be expanded to include additional information, also known as STP Phase 2. To support the businesses, ATO’s approach to STP Phase 2 will be flexible, reasonable and pragmatic based on the business readiness/individual circumstances.

What is STP Phase 2

STP Phase 2 is the expansion of STP to include additional information.

The way you submit STP reports won’t change. However, where STP Phase 1 was a way of reporting employees’ tax & super to the ATO, STP Phase 2 expands the program to capture more information.

Benefits of STP Phase 2

STP Phase 2 will reduce the reporting burden for employers who need to report information about their employees to multiple government agencies such as Centrelink.

STP Phase 2 will permit all relevant information to be reported through the payroll system and allow agencies to collect this information directly from the ATO. It will also help Services Australia’s customers, who may be your employees, get the right payment at the right time.

What isn’t changing

While employers will need to report additional information in STP report, there are many things that will stay the same, such as:

• the way STP is currently lodged;
• the due date;
• the types of payments that are needed;
• tax and super obligations;
• end of year finalisation requirements.

When STP Phase 2 starts

The mandatory start date for STP Phase 2 reporting is 1 January 2022. Consult with your software provider about implementing STP Phase 2.

Summary of STP Phase 2 reporting

• Disaggregation of gross – components of gross earnings will now be itemised separately
• Income types – closely held payees (e.g., family members), working holidaymakers & labour-hire
• Employment and taxation conditions – employment basis, information on TFN declaration, details of when and why they leave
• Country codes – for Australian residents working overseas
• Child support garnishees and child support deductions – Phase 2 will allow employers to report child support deductions/garnishees via pay events thus removing the need to report separately monthly
• Reporting previous Business Management Software IDs and Payroll IDs – This replaces the need for manual adjustments to ensure employee YTD earnings are not overstated.

Contact us for an obligation free consultation or visit ATO website for more information.

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