Single Touch Payroll Stage 2

Single Touch Payroll (STP) was introduced as an Australian Government initiative to reduce employers’ reporting workloads to relevant government agencies regarding payroll information on:

• Salaries and wages
• Pay as you go (PAYG) withholding
• Superannuation

An expansion of STP, referred to as STP phase 2 will look to further streamline reporting information about employees to government agencies, especially where employees need to report to multiple government agencies.

What are the benefits of STP Phase 2 for employers?

The ATO will use the STP Phase 2 information to streamline employer interactions. For example:

• Employers no longer having to send employee tax file declarations to the ATO. Your employee will provide it to you, and you’ll need to keep it with your employee records.
• If you’re using a concessional reporting option, such as for closely held payees or for inbound assignees, you’ll be able to tell the ATO through reporting income types.
•  If you make a Lump sum E payment, you won’t need to provide Lump sum E letters to your employees. You’ll have included the amount and the period it relates to.
• If you change software or your employee’s payroll ID, you can tell the ATO in your STP report if your solution has this functionality. This will help fix issues with duplicate income statements for employees in ATO online services through myGov.
• Payroll information you report to us will be shared in near real-time with Services Australia to be able to streamline requests:
• For you to provide or confirm employment and payroll information about your employees
• Businesses may also no longer need to provide separation certificates when their employees leave – with the date and reason an employee’s leave being in the STP report.
• Businesses can also voluntarily report child support deductions or garnishees (or both) through STP. This reduces the need to send separate remittance advices to the Child Support Registrar.

STP phase 2 was to start from 1 January 2022 with many payroll software provides obtaining exemptions to the start date of STP phase 2 reporting which are now approaching. For example the following payroll software providers have obtained STP Phase 2 exemption start dates to the following start dates.

• MYOB payroll users start date for STP phase 2 reporting is 1 January 2023
• Xero payroll users have a start date of 31^st March 2023 for STP phase 2 reporting. 
• Reckon payroll users have a start date of 30^th June 2023 for STP phase 2 reporting. 

You should ensure your payroll software is STP phase 2 compliant and you are reporting your STP information correctly as Single Touch Payroll reporting is compulsory. If you or your software provider has an exemption to a later start date to report using STP Phase 2 please be aware of the start date of Single Touch Payroll Phase 2 and ensure you are reporting correctly at this time.

If you have any questions or wish to discuss single touch payroll, you can contact the team at Synergy Consolidated directly.