Expanding Single Touch Payroll Phase 2

Anthony de Jager • May 24, 2022

What We Think You Should Know

The Australian Taxation Office (ATO) recently announced that they would be getting in touch with businesses with information about transitioning to Single Touch Payroll (STP) Phase 2, where they have not already done so. They will exclude those who have started reporting or have an employer deferral.

To help you prepare for the transition, we have summarised some of the key things we think you should know, including:

What Single Touch Payroll Phase 2 is
When it comes into play
What the main changes are
What is not changing
What is next

What Single Touch Payroll Phase 2 is

Single Touch Payroll (STP) Phase 2 will reduce 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.

When STP Phase 2 starts

Phase 2 came into effect on 1 January 2022 for all organisations using Digital service providers (DSPs) software that was already enabled to offer Phase 2 reporting.

If your software was not enabled at this time, then your DSP should have filed for a deferral. Then, when your phase 2 enabled solution is ready, your DSP will let you know what you need to do.

Key changes

Most of the additional information you need to report should already be captured in your current payroll software.

The key changes to the STP report include:

What isn't changing

While you'll need to report additional information in your STP report, many things will stay the same, such as:

the way you lodge
the due date
the types of payments that are needed
tax and super obligations
end-of-year finalisation requirements.

What's next

There are some things you can do now to prepare, such as:

review the STP Phase 2 employer reporting guidelines
consider how some of the information you already report through STP is changing
find out what new information you'll need to report and consider where you capture and store some of this information now if it's not in your payroll system
review your business and payroll processes, and plan f or how and when you'll need to do this.

How we can help

If you have any questions or concerns about STP Phase 2 and the key changes, then please get in touch with our team, who would be happy to advise you.

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