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Introduction To Changes In Single Touch Payroll Reporting

To reduce the reporting burden of an employer to government agencies, the Australian Government started an initiative called Single Touch Payroll (STP). This reporting technique allows employers to report employees’ payroll information every time they are paid through STP-enabled software.

Most commonly, the payroll information includes salaries and wages, pay as you go (PAYG) withholding and superannuation.

In its recent announcement, the Government expanded the Single Touch Payroll (STP) reporting to STP Phase 2. This means, if you have employees whom you pay at regular intervals, start reporting the ATO whenever you run payroll. With this move, you can keep your reports updated. 

If you are starting with your Phase 2 reporting as an employer, you must be aware of the changes required that includes:

  • Checking changes made to payroll pay codes or categories when they align with Phase 2
  • Reviewing allowances an employee pays and how they need to be reported in Phase 2
  • Understanding changes to salary sacrifice reporting for Phase 2
  • Understanding how to assign an income type to each payment reported

After the expansion of Single Touch Payroll to Phase 2 Single Touch Payroll reporting, any amount paid to closely held employees or payees should now be reported through STP. Some concessional reporting options for closely held payees include:

  • Reporting actual payments on or before the date of payment
  • Reporting actual payments quarterly
  • Reporting a reasonable estimate quarterly

Steps To Follow For Preparing STP Phase 2 Reporting

  • Find out when your DSP will be ready
  • Know your required start date
  • Consider if you need more time to make transition
  • Check if you need to make any changes to payroll
  • Review your tax allowances
  • Understand changes to salary sacrifice reporting
  • Understand the requirements of assigning an income type
  • Make sure you have the relevant information in payroll system
  • Talk to your tax or BAS professional or payroll provider
  • Visit the Fair Work Ombudsman website

For more information and resources to help you understand the changes, seek an advice from our tax accountants or BAS agent at KPG Taxation.