What is Single Touch Payroll Phase 2?
This is the next part of the STP rollout. Where Phase 1 was a way of reporting employees’ tax and superannuation to the Australian Tax Office (ATO), STP Phase 2 expands the program to capture more information such as a further breakdown of gross amounts and income types, required to be reported to the ATO each payday.
This will reduce the compliance burden for employers and individuals and help the administration side of things for social support services such as Services Australia.
When Do Employers Need to be Compliant?
As announced, employers need to start sending additional payroll information through Single Touch Payroll from 1st January 2022 (unless they have a deferral).
Whilst the start date for STP phase 2 remains 1st January 2022, the ATO is committed to supporting employers transition to STP Phase 2 reporting by being flexible and reasonable. In September 2021 the ATO announced a blanket deferral in light of the business situation at that time. Australian employers will now have two more months to transition to the second phase of Single Touch Payroll. (Source: Accountants Daily – ATO announces STP Phase 2 blanket deferral)
Employers whose payroll solution is ready for 1st January 2022 will be considered to be reporting on time provided they start Phase 2 reporting before 1st March 2022. Employers will not need to apply to the ATO for more time.
Are Software Providers Ready?
With STP Phase 2 heavily reliant on software providers to update their payroll solutions, the ATO has also announced that further deferrals will be available to providers that need more time. Customers of these software providers will automatically be covered by that deferral.
See below a breakdown of software information links to discuss:
Xero: Xero Blog – Single Touch Payroll Phase 2 is coming: Here’s what Xero users need to know
Intuit/QBO: Intuit – Single Touch Payroll (STP) Phase 2 FAQ
GovReports: GovReports Upgrade – Single Touch Payroll Phase 2
We're ready to help
Easy Books for Better Business is trained and ready to help with the transition to STP Phase 2. If you'd like to discuss the matter, please contact us via the button's below