This is the next part of the STP rollout. Phase 1 was a way of reporting employees’ tax and superannuation to the Australian Tax Office (ATO). 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?
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.
Australian employers will now have two more months to transition to the second phase of Single Touch Payroll as the ATO announces a blanket deferral in light of the current business environment.
Employers whose payroll solution is ready for 1st January 2022 will 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.
Is your Xero 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. As a result, Xero has requested and received a deferral from the ATO, giving our partners and customers more time to transition. If you’d like a copy of the deferral letter from the ATO, this is available within the payroll section of Xero (you’ll need to log in to access this).
If you have any problems with STP phase 2, please contact our friendly team at Diverse.