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.
Mandatory STP Phase 2 reporting came into effect on 1st January 2022.
What is included in your STP Phase 2 to the ATO
Your STP Phase 2 solution will send the ATO a report with the information they need, such as:
- details of the remuneration you pay
- the type of income for the employee (such as salary and wages, or working holiday maker income)
- the components which make up the amounts (such as gross pay, paid leave, allowances or overtime)
- details of your pay as you go (PAYG) withholding
- the amounts you have withheld from payments you make
- information about how you calculated the amount, which you currently provide to us by sending a copy of the employee’s TFN declaration
- super liability information.
Benefits of STP Phase 2
Benefits for employers
The ATO will use the STP2 information to streamline employer interactions. For example:
- You’ll no longer have to send the ATO your employees’ TFN declarations. Your employees 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.
The ATO will also share payroll information that has been reported in near real-time with Services Australia. They’ll use it to streamline requests:
- for you to provide or confirm employment and payroll information about your employees
- from your employees to provide employment and payroll information such as pay slips for prior periods.
You may no longer need to provide separation certificates when your employees leave. The date and reason an employee leaves will be in your STP report.
You can also voluntarily report child support deductions and/or garnishees through STP. This reduces the need to send separate remittance advices to the Child Support Registrar.
If you have any questions in relation to any of the above, please contact our Books and Bas team or your Account Manager.