22 Apr Single Touch Payroll Phase 2
Dear Employers, As you may aware of that in the 2019/2020 budget, the government announced that Single Touch Payroll (STP) would be expensed to include additional information (AKA STP Phase 2). the mandatory start date for STP phase 2 reporting will be 1 January 2022. Then what is STP phase 2? The initial implementation of STP was a significant step in the digitisation of reporting from Australian businesses to government departments. STP Phase 2 will expand on this digitisation by requiring employers to report additional information through STP on or before each payday. This will ultimately reduce the compliance burden for employers and individuals who currently report information to multiple government agencies. As stated by the ATO, it will also support the administration of the social security system.
What’s next? As a employer, we assume you have already adopted some sort of STP-enabled software through your digital service provider in the past, such as Xero or MYOB. There is Nothing you need to do right now apart from following up some degree setup instruction by your provider. More information about applying for addtional time, if required to transition to STP phase 2 will be provided by the ATO shortly. What’s the key changing areas?
- Employment Condition The extra information you will include in your STP report will mean that you will No Longer need to send Tax File Number (TFN) Declarations to us – you will only need to keep them with your employee records. A cessation type information will be included, when your employee ceases employment, you will need to provide a reason for the separation in your STP report. It will reduce your need to provide them separation certificates.
- Income Type and Country Code They are introduced to identify payments you make to your employees with specific tax consequences, such as in bound assignee, working holiday maker and closely held payees etc.
- Disaggregation of Gross (Wages) Your STP report will separately itemise the components which make up the gross amount by payment types, including paid leave bonuses, commission, director fees, overtime, allowance and salary sacrifice.
- Salary Sacrifice Reporting it separately in STP to help your employees better understand their super entitlement.
- Lump Sums Introducing financial year indicator and new lump sum W.
- Reporting Previous Business Management Software IDs and Payroll IDs It will be applicable where you have changed your business structure or software preciously.
- Child Support Garnishees and Child Support Deductions You will have a option to reduce the need for separate remittance advice reporting to the Child support registrar.
For more information bout What We Know about STP Phase 2, please listen to the below Accountants Daily Insider podcast (posted on on 12/03/2021).