Single Touch Payroll (STP) is a government initiative that sends tax and superannuation information from your payroll software to the Australian Taxation Office (ATO) as you prepare your payroll.
Phase 1 was rolled out from 1 July 2018 and the start date for Phase 2 is 1 January 2022.
STP Phase 2 aims to streamline the reporting obligations for employers and individuals and remove the need for manual reporting to other government agencies.
The key changes to STP Phase 2 are:
Your STP report currently includes a gross amount which is the total of many different components and payment types. As some of these are treated differently for social security purposes, you will now need to report them in more detail.
The additional information on income types will enable users to more flexibly:
Employee employment and tax conditions, (such as employment basis, Tax File Number declaration information and termination details) are currently provided in different ways and on different forms. Phase 2 will streamline this process by including the information in your STP report.
If making payment to an Australian resident working overseas, there is a requirement to provide information relating to the host country.
There will be the option to include child support garnishees and deductions in your STP report. This will reduce the need to give separate remittance advices to the Child Support Registrar.
You may have the option to provide the ATO with previous Business Management Software IDs and Payroll IDs in your STP report. This might occur when you’ve changed your business structure or changed software and can’t zero out or finalise previous records.
Providing this information will help the ATO reduce and fix issues with duplicate income statements for employees in ATO online services.
The following information has been released for specific accounting software programs:
STP Phase 2 will not change the way businesses process pay runs or lodge STP through Xero.
Due to the additional reporting requirements, a review of Pay Items, employee details and business information will need to be undertaken.
Xero will release more information once the payroll system is updated in the background.
Xero has been successful in receiving a 12 month deferral to be able to lodge the first STP Phase 2 pay run by 1 January 2023.
More information released by Xero can be found here:
Intuit QuickBooks (QBO)
QBO has implemented some updates into its payroll system in preparation to be STP Phase 2 compliant which has resulted in some reviews to be undertaken.
Users should look to review:
QBO has received a deferral until 1 March 2022 to lodge the first STP Phase 2 pay run.
More detailed information released by QBO can be found here:
MYOB has been successful in receiving a 12 month deferral to be able to lodge the first STP Phase 2 pay run by 1 January 2023.
Throughout 2022, you’ll be prompted in your AccountRight company file to make the move from STP Phase 1 to STP Phase 2.
At that time, your payroll details will be checked to ensure they meet the new STP requirements, and you’ll be notified if anything needs updating.
Nothing needs to be done yet, however, if you’d like to get a head start you can:
More information can be found here:
Similar to AccountRight, Essentials will prompt you through the STP Phase 2 process as more information is released.
More information can be found here:
Reckon customers will not need to adjust the way they manage payroll at the moment.
A software update will be formally released in the future which will include all updates to be STP Phase 2 compliant.
Reckon has been successful in receiving a 12 month deferral to be able to lodge the first STP Phase 2 pay run by 1 January 2023.
More information released by Reckon can be found here:
AFS has experts in each cloud accounting software who can help you be STP Phase 2 compliant. If you have any questions, or would like assistance preparing for STP Phase 2, please contact one of our specialists on 03 5443 0344 or email firstname.lastname@example.org.
Click here for more information on how our accounting software experts can help your business.