Single touch payroll has been around since July 2018 as the way you send your payroll information to the ATO. We are very familiar with the current requirements for STP as they have been in effect since July 2018, and they are not changing. STP changed the way in which employers reported to their PAYG and super information to the ATO.
We have had two years to get familiar with Phase 1 and implement the requirements. However, the ATO is changing and updating the requirements and this means you need to report additional information We are moving into Phase 2 which streamlines the reporting obligations for the payer and payee and removes the need for manual reporting to other government agencies.
These updates include new categories and need to start being implemented by the 1st of January 2022.
Flexibility in transition
The ATO requires those who report additional payroll information to have it fully implemented before 1 March 2022 in order to be assessed as meeting the January deadline. If you need more time you have to apply before the December 2021 deadline
If you need more time
There are exceptions to this date if you obtain a STP Phase 2 deferral which can extend the date to 1 January 2023. MYOB, Xero and Reckon have obtained these deferrals for their users.
What are the requirements
The additional information that is required to be reported relates to knowledge gaps in the payroll submission process and a better understanding of employee payment details for the ATO.
These new fields are
· paid leave
· child support deductions – this removes the need to report separately on a monthly basis.
· salary sacrifice
· lump sum payments
· country codes – this relates to foreign employment income and working holiday makers.
They also require you to separately itemise the components which make up the gross payments like paid leave, allowances, overtime, bonuses and commissions, director fees, lump sum W payments and salary sacrifice amounts. Now you need to report all allowances separately and not just an over reaching expense allowance that may have been deductible in your employee’s individual income tax return.
The main extra reporting items to be aware of that have been added to your STP report are:
· Tax file number declaration – these are no longer required to be sent to the ATO.
· Termination reason – this is now mandatory and removes the need for an employment separation certificate.
· Employment basis – now mandatory these include individual reporting of full-time, casual and part-time employment.
Need more information
For additional information check out the ATO website
It is recommended that you have these updates ready to go by the 1st of January 2022. If you need assistance with your specific circumstances in regard with any of the STP Phase 2 requirements, please contact us for assistance on 9217 2400.