Single Touch Payroll (STP) Phase Two 

After the successfull rollout of STP reporting in 2019, phase 2 is on the way.

The goal is to make it easier for employers to report information about their employees to multiple government agencies. The mandatory start date for STP Phase 2 reporting will be 1 January 2022. 

SuperChoice will be ready for 1 January 2022 STP Phase 2 roll-out.

STP Phase 2 Changes

The ATO Needs More Information

Phase two will make it easier for employers to report specific payment details made to employees across all income streams.
 

A. Gross Income, a breakdown which includes:

o    Gross residual (excluding below)
o    Salary Sacrifice (including Salary Sacrifice Super & other Salary Sacrifice)
o    Bonus & Commissions
o    Overtime
o    Director Fees
o    Paid Leave (not limited to; Cash-out of leave, Paid Parental, Workers Compensation).

B. Allowances, a breakdown which includes: 
o    Car expense, laundry allowances, meal allowance, travel, accommodation.

New Fields Will Be Introduced To Give More Accurate Descriptions
  • employment basis

  • reason for cessation

  • tax scale

  • offset amount

Simpler, Better Reporting

Automated reports
Child support agencies will automatically receive reports for deductions or wage garnishing as a total for the period. No more separate reporting.

 

Easier to report on back payments
Updated capability to capture back-payments, and payments in arrears for previous reporting periods.

One less report
With the new format of the STP report, employers will no longer need to send in employees TFN declaration.

Updated Privacy Measures

Updated reporting capability to protect data with additional transition fields around the use of IDs, and ensuring previous data isn’t shown on screen.

What it means for you

Single Touch Payroll Phase 2 is a bigger move towards more complete digital records and reporting. Making it easier for everyone.

Although there's more information you need to provide, the way employers manage Single Touch Payroll won't change. 

What stays the same

  • The way you lodge your STP report today

  • STP reports are still due on or before payday unless you are eligible for a reporting concession

  • the types of payments that are in-scope for STP reporting

  • taxation and superannuation obligations

  • end of year finalisation requirements.

Payroll

  • Structured and simplified reporting by employers to the ATO.

  • Standardisation of payroll components into groupings for simpler.

  • Implementation of payrolls and EOY housekeeping by employers.

  • Realignment of income and data fields for simpler reporting.

  • Phase 2 isn’t a new build, it’s a remapping exercise.

  • Clearer & cleaner data remove misunderstanding around the use of BMS ID & Payroll ID which resulted in duplicate records.

Employee

  • All your information will be in one place –
    My Gov.

  • Less paperwork and more complete digital record.

  • It will be easier to understand how you’re getting paid and how it’s defined by income type.

  • The breakdown will make it easier to identify payment types for tax and reporting purposes.

  • Making, tax time easier and understandable.
    It’s all there and your tax accountant can categorise payments made to you as per ATO standards.

Employers

  • Makes it easier to distinguish between the BMS ID & Payroll ID with no risk of duplication.

  • Alignment of your payroll components into specific groups to simplify the payment system to employees.
     

Simplified admin

No more employee letters to explain payments in arrears.
No more manual reporting of child support payments.
No more lodging of employee TFN declarations.

What you need to do to get ready

If you're an employer, right now there is nothing for you to do


We're working with our payroll partners to build and test the solution ready for the 1 January 2022 roll-out.
They'll let you know what you need to do closer to the date. 

If you're a payroll provider, we've started our implementation plans

Reach out to your account manager if you need to know more.
 

Don't think you'll be ready for 1 January 2022?

Payroll providers (DSPs) can apply to the ATO to defer their start date.
If you're an employer and your payroll provider gets an extension, you will automatically qualify for the extension too.

 

For employers wanting to extend their timeline independently of their payroll provider, you need to apply via the ATO.

Details can be found on their website.