Employers should now know of the Single Touch Payroll Phase 2 reporting requirements. While some accounting and payroll software already meets the ATO’s reporting requirements, some software providers have deferrals in place to allow customers more time to transition to the new system.

Single Touch Payroll (STP) Phase 2 was initially planned for 1 July 2021 to align with the mandatory reporting for all employers but was then postponed to 1 January 2022 to allow software providers and employers more time to transition.

Some software providers have deferrals in place until December 2022 or March 2023. Check with us or your payroll software provider if you're not sure when you have to start using STP Phase 2.

STP Phase 2 requires extra information to be reported with each STP pay event. Additionally, Phase 2 submits the pay run information to multiple government agencies by using standardised categorisation of income and payroll components.

These changes include detailed income types, lump-sum payments, itemised allowances, child support and the ability to lodge tax file number declarations from within STP reporting. Termination payments also include the reason for ceasing employment.

Talk to us if you'd like to review your payroll software and systems before upgrading to STP Phase 2.

Your payroll software will likely require you to upgrade to the Phase 2 system. If you haven't upgraded yet and you're using software with an approved deferral, they will let you know when upgrading to STP 2 becomes mandatory.

If you want to learn more about this topic as well as Binghay & Co and our service offerings, contact us to set up a FREE consultation so we can get started.