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Single Touch Payroll (STP) Phase 2

About STP Phase 2

STP is the new norm for reporting payroll information electronically to the ATO. STP Phase 2 is an expansion on an employer’s current STP reporting obligations. This expansion will require the following information to be transmitted to the ATO as part of an employer’s regular STP lodgement process:

  • Employment and Taxation Conditions:
    • Employment basis such as full-time, part-time, casual, or other basis
    • Items that influence how an employee’s PAYG Withholding has been calculated (i.e. whether an employee has any student loans)
    • Details of why an employee has left employment
  • Itemisation of Gross Wages:
    • Bonuses and Commissions
    • Director Wages
    • Paid Leave
    • Salary Sacrifices
    • Overtime Payments
    • Allowances
    • Lump Sum Payments
  • Income Type:
    • Salary and Wages or Working Holiday Maker Income
  • Country Code:
    • When making payments to Australian residents working overseas
  • Child Support and Garnishees:
    • This is optional reporting to reduce additional contact requirements with the Child Support Registrar

When does STP Phase 2 come into effect?

The start date for STP Phase 2 is 1 January 2022, however, the ATO is being flexible with the implementation process and employers are provided with an automatic extension date to 1 March 2022. This means that as long as an employer implements STP Phase 2 by 1 March 2022, they will be complying with their expanded STP obligations.

Software Deferrals

A number of software providers have received approval for a delayed transition to STP Phase 2 to ensure their payroll solutions support the new STP reporting requirements. Employers using software providers that have an approved deferral date will also automatically receive an extension to comply with STP Phase 2.

Current software provider deferrals include:

ProviderDeferral Date
Xero31 December 2022
MYOB1 January 2023
QuickBooks1 January 2023
Reckon1 January 2023

If you would like more information in relation to STP Phase 2 or assistance with its implementation, please do not hesitate to contact the Halpin Partners team on (07) 4052 0800.

Danielle Bradley, Graduate Accountant

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