STP Phase 2 - What it all means

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STP Phase 2 is an expansion of the original STP system. It is designed to reduce the reporting burden for employers through the integration of multiple government departments data needs. This will help employers who need to report information about their employees to multiple government agencies.

The way employers manage Single Touch Payroll won't change, though your payroll software may have their own date for you to change over.

Key due dates for software providers:

• Myob: 1^st January 2023
• Xero: 31^st March 2023
• Reckon: 1^st June 2023

It is vital you meet the due date of your provider, so it is imperative you speak to them as a matter of urgency.

What stays the same

General

• The way you currently lodge your STP report
• STP reports are still due on or before payday unless you are eligible for a reporting concession
• The types of payments that are in scope for STP reporting
• Taxation and superannuation obligations
• End of year finalisation requirements

Payroll

• Structured and simplified reporting by employers to the ATO.
• Standardisation of payroll components into groupings for simpler reporting.
• Implementation of payrolls and EOY housekeeping by employers.
• Realignment of income and data fields for simpler reporting.
• Phase 2 isn’t a new build, it’s a remapping exercise.
• Clearer & cleaner data remove misunderstanding around the use of BMS ID & Payroll ID which resulted in duplicate records.
• Cleaner data remove misunderstanding around the use of BMS ID & Payroll ID which resulted in of y

Employee

• All your information will be in one place – My Gov.
• Less paperwork and more complete digital record.
• It will be easier to understand how you’re getting paid and how it’s defined by income type.
• The breakdown will make it easier to identify payment types for tax and reporting purposes.
• Making, tax time easier and understandable.
  

Employers

• Makes it easier to distinguish between the BMS ID & Payroll ID with no risk of duplication.
• Alignment of your payroll components into specific groups to simplify the payment system to employees.

Simplified admin

• No more employee letters to explain payments in arrears.
• No more manual reporting of child support payments.
• No more lodging of employee TFN declarations.​

What you need to do to get ready

If you're an employer

Talk with your payroll software solution provider to switch over to STP2.

What's changed in STP2

The ATO Needs More Information

Phase two will make it easier for employers to report specific payment details made to employees across all income streams.

Simpler, Better Reporting

Automated reports
Child support agencies will automatically receive reports for deductions or wage garnishing as a total for the period. No more separate reporting.

Easier to report on back payments
Updated capability to capture back-payments, and payments in arrears for previous reporting periods.

One less report
With the new format of the STP report, employers will no longer need to send in employees TFN declaration.