Single Touch Payroll Phase 2 starts 1 January 2022
If your business has employees, you are probably using Single Touch Payroll (STP) to report payroll and superannuation information to the ATO.
Note – Certain employers can apply for an exemption from using STP, for example, small employers (1-19 employees) with no or low digital capacity or no or unreliable internet service.
STP Phase 2: Expansion of STP
The Government announced in the Federal Budget 2019–20 that STP would be expanded to include additional information. This expansion is known as STP Phase 2.
STP Phase 2 reduces the 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.
What does STP Phase 2 mean for your business?
STP Phase 2 reporting means changes to the way you report:
§ Amounts paid to staff – Instead of reporting a single gross amount, you’ll separately show items such as overtime, paid leave, bonuses and commissions;
§ Income types – You’ll include information such as whether a payment is regular salary and wages or income for working holiday makers;
§ Employment conditions – You’ll provide additional information such as whether your employee is full-time, part-time or casual and if they leave, the reason they stop working with you;
§ Employees’ TFN declarations – You’ll no longer have to send declarations to the ATO. The employee will provide it to you, and you’ll need to keep it with your employee records.
Note – The ATO has said penalties will not be imposed for genuine mistakes for the first year of STP Phase 2.
What if I need more time to transition to STP Phase 2?
STP Phase 2 is due to start on 1 January 2022.
The ATO has advised that their approach to STP Phase 2 will be flexible, reasonable and pragmatic based on your business readiness and/or individual circumstances.
If you need asssitance in transitioning or deferring STP, please contact our office to discuss further.
Further notes
§ If your solution is ready for 1 January 2022, you should start STP Phase 2 reporting.
§ You will be considered to be reporting on time if you start STP Phase 2 before 1 March 2022. You won’t need to apply for more time.
If you would like assistance with the content provided in the article, call our office on (03) 9603 0066 today.