ATOFinanceLegal

Single Touch Payroll 2 Is Coming

What is Single Touch Payroll Phase 2?

In the 2019–20 Budget, the Government announced that Single Touch Payroll (STP) would be expanded to include additional information.

The expansion of STP, also known as STP Phase 2, will reduce 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.

The mandatory start date for Phase 2 reporting is 1 January 2022.

The ATO has a specific web page just for information on STP Phase 2. You can find it here, including a link to an Employee Reporting Guideline (found here). They have also recorded some excellent webinars which would be handy to watch if you don’t want to read through all the above information (found here).

In short, some of the updates include:

  • You’ll no longer have to send the ATO your employees’ TFN declarations.
  • If you’re using a concessional reporting option you’ll be able to tell the ATOthrough reporting income types.
  • You won’t need to provide Lump Sum letters to your employees for particular payments.
  • 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.
  • The ATO will also share payroll information you report to them in near real-time with Services Australia.

What isn’t changing:

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

If your church is using MYOB or Xero as your bookkeeping software of choice, be assured that they are working with the ATO to make sure their software is compliant. As the church bookkeeper or accountant, you may need to manually update some payroll fields for staff and MYOB or Xero should be advising you when to need to do this.

MYOB Blog Post on STP Phase 2

Xero Blog Post on STP Phase 2

If you are using an alternative software package, please check their website to make sure that they are also working on a compliant solution.