Single Touch Payroll (STP) is being expanded to reduce the burden on employers who need to report employee information to multiple government agencies.
By now most businesses will be well versed in using the first phase of Single Touch Payroll (STP) an ATO initiative designed to streamline the reporting of employee pay, tax withheld and Superannuation with the help of software providers like MYOB.
Phase 2 of the initiative is now underway.
The expansion of STP, also known as STP Phase 2, reduces the reporting burden for employers who need to report information about their employees to multiple government agencies. It helps Services Australia’s customers, who may be your employees, get the right payment at the right time.
What does STP Phase 2 mean for your business?
STP Phase 2 reporting means changes to the way you report:
Amounts paid to staff – Instead of reporting a single gross amount, you’ll separately show items such as overtime, paid leave, bonuses and commissions;
Income types – You’ll include information such as whether a payment is regular salary and wages or income for working holiday makers;
Employment conditions – You’ll provide additional information such as whether your employee is full-time, part-time or casual and if they leave, the reason they stop working with you;
Employees’ TFN declarations – You’ll no longer have to send declarations to the ATO. The employee will provide it to you, and you’ll need to keep it with your employee records.
Benefits of STP Phase 2
TP Phase 2 will help reduce duplication and streamline reporting which will be beneficial for everyone, including accountants, employers, employees, and government agencies.
Employers will no longer need to carry out the following tasks:
- Completion and provision of Employment Separation Certificates for terminated employees
- Monthly completion and submission of child support deductions report
- Provision of employee payment summaries
- Provision of payment summary annual report to the ATO
- Sending of employee TFN declarations to the ATO
Benefits for employees are equally expansive and include:
- Reduced effort and error in calculating and reporting income for the purposes of income support payments
- Improved accuracy and timeliness of payments
- Greater visibility on how changes to income affect entitlements
- Reduced employment income related debts
- Increased equity in determining an individual’s capacity to pay debts
How will these changes impact your business?
These changes will mean at least a minor adjustment to payroll processes for all employers, with the extent to which the additional reporting is required will ultimately depend on the size, structure and type of employees of each individual organisation, as well as the systems and processes they already have in place.
To help ease the transition of employee information over to STP Phase 2, MYOB will be providing additional support and resources prior to and during the change period.
Employees will also benefit from Phase 2, with the information provided feeding directly into Services Australia agencies such as Centrelink and Child Support. This reduces the amount of documentation required to report and make claims and will increase the accuracy of payments due.
Individual tax time will also be made simpler as income details will be pre-filled in each employee’s tax return.
Where can I go for more information?
All the official details on STP compliance, deadlines and more, the ATO website should be your first port of call.
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