Single Touch Payroll phase two

Single Touch Payroll (STP) phase one was an Australian Taxation Office (ATO) compliance regulation introduced in 2016. It mandated the need for employers to send employee payroll information including salary, wages, PAYG withholding, and superannuation through their STP-enabled payroll or accounting software to the ATO each time they ran their payroll.

In the 2019–2020 federal budget, the government announced an expansion of Single Touch Payroll (also known as STP phase two) with a start date of 1 July 2021. In late December 2020, the ATO announced an extension to the mandatory start date for STP phase two to 1 January 2022 in acknowledgment of the disruption caused to suppliers and employers by having to support COVID-19 support initiatives. The ATO has adopted a flexible approach to transition and any phase two reporting that starts before 1 March 2022 will be considered as reporting on time.

The expansion of STP phase two streamlines reporting obligations and extends to data collection, aimed to assist in the reduction of the reporting burden of employers.

• Reducing the burden of reporting to multiple government agencies
• Making better use of, and improving, the information we are already collecting
• Improving visibility of payroll data to support the delivery and administration of the social security system
• Reducing manual processing and removing existing irritants
• Reducing the need for separate child support reporting

There will be additional information employers need to report, which should already be captured in DataPay. The key category changes to the STP reporting as listed on the ATO website include:

• Income stream type
• Other salary sacrifice
• Disaggregation of gross
• Deductions
• Additional reporting for allowance
• Lump sum payments
• Termination reason types
• Tax treatment
• Employment basis
• Previous business management software ID and previous payroll ID
• Country codes
• Child support garnishee and child support deduction

• The way you submit your STP report
• Your STP report’s due date — they're still due either on or before your payday unless you qualify for a reporting deferral
• The types of payments for STP reporting
• Tax and super obligations
• End-of-year finalisation requirements

There will be STP phase two reporting changes introduced to DataPay to allow you to meet your new legislative mandatory STP reporting requirements. In preparation for the functionality to be made available, we recommend you review the ATO employer guidelines in preparation for the transition to STP phase two.