The ATO is expanding the information that businesses send through Single Touch Payroll (STP). From 1 January 2022, most employers will be required to send additional information such as the commencement date of employment and cessation date of employment for employees, their reasons for leaving employment and work type. The basic information about salary and wages and super liability information in Phase 1 of the STP rollout will also be further drilled down in Phase 2, moving away from just reporting the gross amounts.

According to the ATO, the Phase 2 report will also include a six-character tax treatment code for each employee. The code will be automatically generated by the STP software and is an abbreviated way of outlining the factors that can influence amounts withheld from payments.

What’s Not Changing?

While you will need to report additional information in your STP report, there are many things which aren’t changing, such as:

• The way you submit your STP report
• STP reports are still due on or before pay day 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

There is nothing you need to do right now with the ATO to implement Phase 2 of STP. The ATO is working closely with digital service providers (ie Xero, MYOB) who will update their STP-enabled software. What you need to do will depend on the product you use and how you manage your payroll.

While Phase 2 increase in information will be automatically taken care of in most STP software solutions, the increased stratification of reporting may require you to pay more attention to your business’ payroll, to ensure all the information you enter into the system is correct.

Your digital service provider will be in contact with you about the next steps. More information about applying for additional time (if required) to transition to STP Phase 2 will be provided soon.