Single Touch Payroll (lovingly referred to as STP) Phase 2 is now mandatory for all businesses employing staff in Australia.

Some key changes are coming into play.

The good news is that most of the additional information you need to report should already be captured in your current payroll software.

So strap on your boots and get ready for the lowdown on STP!

Key STP Phase II changes

To keep things nice and simple, we have summarised the changes below:

The key changes to the STP report include:

Disaggregation of gross

Your STP report currently includes a gross amount totalling different components and payment types. Some of these are treated differently for social security purposes, so you now need to report in more detail. Instead of summarising a single gross amount, you will now separate into the below reports:

  • gross
  • paid leave
  • allowances
  • overtime
  • bonuses and commissions
  • directors’ fees
  • lump sum W
  • salary sacrifice

Employment and taxation conditions

Many factors influence how you manage your employees in your payroll such as their employment basis, TFN info and details of why they depart your organisation.

You currently provide this information in different ways and on different forms.

Phase 2 will now streamline the way you provide this information. Instead of providing it in different ways on different forms, it’s now streamlined in your single STP report.

Income types

Changes to reporting of income types in Phase 2 make it easier for your employees to complete their tax returns.

It now identifies payments you make to your employees with specific tax consequences and helps the ATO identify where you are using a concessional reporting arrangement.

Country codes

You can now provide country codes with a new country code reporting option.

Child support

An optional addition is the inclusion of child support garnishees and deductions which will reduce the number of separate remittance advices to the Child Support Registrar.

Business Management Software IDs and Payroll IDs

Another optional addition is the provision of Business Management Software IDs and Payroll IDs in your STP report. You’ll provide these when you’ve changed your business structure or changed software. This now helps the ATO to reduce duplicate income statements for employees in ATO online services.

If you have any queries about the introduction of STP, get in touch with our outsourced bookkeeping department.

Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 26 years’ industry experience. Don’t trust just anyone with your trust accounting. Book an appointment with an End of Month Angel today.