Single Touch Payroll – Phase 2

Today we are reporting with an update on news in Single Touch Payroll world.

Single Touch Payroll (STP) is an ATO initiative designed to streamline the reporting of employee pay, tax withheld and superannuation with the help of software providers (like MYOB and Xero). Phase 2 of the initiative is now underway.
From 1 January 2022, businesses are required to report additional information via STP.

With the assistance of your STP solution or software provider you will now also need to send the ATO the below information:

• 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.

• Superannuation liability information.

• 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 Certificates
– These certificates are no longer required, as the reason why an employee has left the business will now be
provided via STP reports.

• Lump Sum E payments
– Previously, if an employer makes a payment owing from previous years a Lump Sum E letter would need to be
provided to the employee. This information must now be included in Phase 2 reporting, with details of the payment
appearing in the employee’s income statement.

What remains the same?

• Tax and superannuation obligations do not change.

• The types of payments required to be made do not change.

• The way you lodge STP data and the due dates do not change, including end of year finalisation events.

• The requirement to prepare and lodge Activity Statements (where applicable).

Once your STP solution is upgraded to offer Phase 2 reporting you can transition at any time throughout a financial year.

For more information, the best place to start will be the ATO website (Link Here). Further to this, review the information provided by your payroll software provider for how to ensure you’re ready to report as soon as possible.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

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