Single Touch Payroll (STP) Phase 2
Move to STP Phase 2 before the 1st January 2023 deadline
Single Touch Payroll (STP) Phase 2 is an expansion of the ATO’s payroll reporting system, where you’ll be required to report additional information and clarify the payments you make to your employees. The deadline to make the switch is fast approaching, and you have until 1 January 2023 to complete the transition.
New In STP Phase 2
➡ Employment Type
Previously optional, reporting of employment type will be mandated under Phase 2 reporting. Businesses will need to declare whether their employees are full-time, part-time or casual, in addition to new categories such as labour hire or volunteer.
➡ Disaggregation of Gross
Income will no longer be reported as a gross sum, instead each component must be itemised including salary sacrifice, overtime, paid leave, bonuses, commissions, director’s fees, allowances, lump sum payments, paid parental leave, and worker’s compensation.
➡ Country Codes
If you have Australian resident employees working overseas, businesses will need to provide details of the host country.
➡ Tax File Number Declarations
Information collected from TFN declarations – including the TFN itself, employment type and whether the employee has a HECS-HELP debt – is to be included in STP reports and the declaration itself will no longer need to be sent to the ATO.
➡ Employee Separation
Employee Separation certificates are no longer required, as the reason why an employee has left the business will now be provided via STP reports.
➡ Child Support
Businesses will have the option to include child support garnishees and deductions in their STP report, reducing the need to provide separate advice to the Child Support Registrar. (Please note: this option is not yet available in MYOB products.)
Penalties for STP Non-Compliance
Under STP, there are penalties for missing or late STP reports. It’s calculated at $210 for every 28 days your report is overdue. There is a maximum penalty of $1,050 for small businesses, $2,100 for medium entities, $5,250 for large entities, and $525,000 for global entities.
However, under STP Phase 2, genuine reporting mistakes will not be penalised in the first year until 31 December 2022.
Ready to Make the Move?
If you’re using SDP Tax Accountants as your Bookkeeper, you don’t need to do anything. We will take care of everything and help you make the switch to STP Phase 2.
If you do your own bookkeeping, to get started, we highly recommend you watch the STP2 setup video guide and read more information here: