Single Touch Payroll (STP) – the reporting framework whereby employers automatically provide the ATO with payroll and superannuation information as employees are paid – has been mandatory for all employers since 1 July 2019.

After two years of embedding, the ATO has confirmed that Phase 2 of STP reporting will commence on 1 January 2022.

The expansion of Single Touch Payroll Phase 2 is set to ease reporting for employers who need to provide information about their employees to multiple government agencies.

A detailed guide for employers is anticipated to be released in June 2021 and the ATO is working closely with Digital Service Providers to update STP software to meet the new reporting requirements.

Key changes under STP Phase 2

Tax File Numbers

Employers will no longer need to provide the ATO with Tax File Number (TFN) Declarations as this information will be captured in STP reports from 1 January 2022.

Disaggregation of gross

STP currently includes a gross amount. This is changing and the following will need to be reported separately.

  • Allowances
  • Bonuses and commissions
  • Directors' fees
  • Overtime
  • Paid leave
  • Salary sacrifice

Employment conditions

Employment conditions will now need to be reported including the following:

  • Cessation date and reason
  • Employment basis
  • Tax treatment

Other information that will also need to be reported includes

  • Specific lump sum payments
  • Child support garnishees and deductions;
  • Income type and Country codes
  • The reporting of previous business management software ID’s and Payroll ID’s

The additional information being provided will be shared with numerous agencies (e.g. FairWork, State Revenue Offices) and will give greater transparency to the respective agencies for data matching purposes.
It is imperative that organisations ensure their processes are robust before 1 July 2021 as deficiencies may be detected in year to date reporting later in the year.

Get in touch to understand what Single Touch Payroll Phase 2 means for you and to discuss how you can prepare now for the 1 January 2022 start date.

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