STP2 – Should be on your radar!
STP (Single Touch Payroll) phase 1 has been with us for some time. Businesses and employees will have settled into it by now as part of business as usual, however more change is on the horizon with STP2.
STP2 won’t change how payroll information is reported to the ATO or the EOFY Finalisation and Income Statement process.
It will change what is reported though. A higher level of detail will be required for employee personal and income data.
This will place an additional body of work on employers in preparation for STP2 to refine their payroll setup.
STP2 will allow government agencies like below to have access to more accurate data, faster:
- ATO – who will have greater visibility on whether the correct amount of superannuation has been paid for an employee and to consider possible tax deduction claims
- Services Australia – who will be able to update payments in closer to real time based on more accurate income details
- Fair Work – will who have access to information to ensure appropriate award wages and allowances are being paid and that employees are receiving appropriate Pay Slip Reporting.
The impacts of this are far reaching and make it critical for employers to ensure their payroll is setup and processed correctly.
For most employers the benefits of STP2 will be small but include:
- No need to lodge TFN Declarations, however they will still be needed to be completed by employees and retained by employers to correctly setup employees in payroll
- No need to provide Separation Certificates
- Minimise contact with Services Australia on things like:
- Voluntary child support deductions
- Establishing a child support garnishee regime/withholding and
- Assisting in the recovery of employee debts owed to Services Australia
When does it begin?
STP2 commencement date was 1st January 2022, however the ATO have advised that employers can join STP2 as their payroll software providers upgrade their software to support STP2 reporting.
Both Xero and MYOB have deferrals in place until 31st December 2022.
IMPORTANT: If you use another payroll software provider, we suggest you check directly with them to determine if they have a deferral in place. If they don’t and they are STP2 ready you need to act now!
We have been attending workshops on what is required for STP2. There is a lot to cover. We will be reaching our to our client base on what has to be done and how we can assist them in due course.
We are taking the advice of our professional bodies in our approach to STP2. For clients who use Xero or MYOB, the majority of the prep work for STP2 will be delayed until after the 2022 EOFY STP finalisation event has occurred. This will be cleaner but will aso give Xero and MYOB teething time to refine their software features for STP2.
So, for now, unless you aren’t using Xero and MYOB, have this on your radar but no need to be alarmed. We have your back and are here to hold your hand through the transition.
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