Those of you whom employ staff need to be ready for Single Touch Payroll (STP) Phase 2 reporting, which starts from 1 January 2022.
New guidelines explaining the changes and what they mean for employers are now available.
STP Phase 2 reporting means changes to the way employers report:
- amounts paid to staff – items such as overtime, paid leave, and bonuses and commissions will be shown separately instead of reporting a single gross amount
- income types – information such as whether a payment is regular salary and wages or income for working holiday makers will be included
- employment conditions – additional information provided such as whether an employee is fulltime, part-time or casual and if they leave, the reason they stop working.
How to lodge and the due date of STP reports don’t change.
Software providers will advise you or your clients when STP-enabled software has been updated and the next steps to take.
In the meantime……… if you need some help deciphering the terms used in the guidelines, the following may help to explain.
- Digital service provider (DSP) – those who develop or deliver digital services that help the community (and business) meet their tax and super obligations.
- Pay event – the file generated by an STP-enabled software or solution. This file must be lodged to us on, or before, the payment date when an employer makes a payment to an employee or payee that is subject to withholding.
- Update event – the service that allows an employer to transition to STP and correct or finalise STP data to us. This does not include employees that are paid payments subject to withholding (pay event).
- STP report or reporting – used for reporting either
- a pay event (upon payments subject to withholding), or
- an update event (upon transition, correction or finalisation).
- BMS ID – a business management software identifier that uniquely identifies the source of employee data sent to us as a specific instance of payroll software.
- Payee payroll ID – a key identifier that represents each employee in the payroll that, in conjunction with payee details and the tax file number (TFN), enables us to uniquely identify the taxpayer.
- Income statement – the ATO equivalent of an employer-issued payment summary. It contains the latest year to date (YTD) STP data reported by employers. It is made available by the ATO through ATO online services accessed through myGov. If an employee does not have a myGov account they can create one and link it to the ATO here.
- Finalise – when an employer must make a declaration to us that they have provided all the information for each employee for a financial year. This is done by providing the finalisation indicator as a part of an employee’s STP report.
Need help preparing for STP Phase 2? Contact us for an appointment.