Your guide to Single Touch Payroll (STP) Phase 2

When it comes to software requirements and the ATO, the one constant we can rely on is change!

By now as an employer, we expect that you will be well aware of your Single Touch Payroll (STP) reporting requirements. STP Phase 2 will be the next step which will incorporate some changes to your processes.

Your obligation as an employer to begin complying with STP Phase 2 depends largely on your payroll software. If MYOB is your preferred software provider, you will need to implement STP Phase 2 now if you are not already compliant.

If Xero is your preferred software provider, you will need to implement STP Phase 2 by March 2023, although the software is ready for you to get started now.

We have provided guidelines below for specific instructions on how to comply with STP Phase 2 depending on your particular software provider. Please note, all employers are required to use STP 2 compliant software.

Please contact your software provider support for the required deadline if you are not using the software listed here.

STP Phase 2 will mean:

• Employers will no longer be required to submit employees’ tax file number (TFN) declarations to the ATO.
• The reporting process will be simpler for closely held payees or inbound assignees.
• Lump sum E-payments will automatically include the required tax information for the relevant employee (employers are no longer required to provide supporting documentation).
• Software changes or changes to your employee’s payroll ID will now be reported via STP.
• The ATO will also share payroll information you report in near real-time with Services Australia.

A quick reference guide for payment types and STP allocations can be found on the ATO website.

Further information on STP requirements for major software providers are as follows:

• Xero
• MYOB AccountRight
• MYOB Essentials
• Quickbooks (STP 2 compliant now)
• Reckon

If you use any other payroll software, and you would like some assistance in understanding your requirements please feel free to contact us.