In the 2019-2020 budget, the government announced that Single Touch Payroll (STP) would be expanded to include additional information. The expansion of STP, also known as STP Phase 2, will reduce employers’ reporting burden for information about their employees to multiple government agencies. It will also help Services Australia’s customers – who may be your employees – get the right payment at the right time. The mandatory start date for Phase 2 reporting is 1 January 2022.

BENEFITS FOR EMPLOYERS INCLUDE:

• You’ll no longer have to send the ATO your employees’ tax file number (TFN) declarations. Your employees will provide it to you, and you’ll need to keep it with your employee records.
• If you’re using a concessional reporting option, such as for closely held payees or for inbound assignees, you’ll be able to the ATO through reporting income types.
• If you make a Lump sum E lump sum Epayment, you won’t need to provide Lump sum E letters to your employees. You’ll have included the amount and the period it relates to.
• If you change software or your employee’s payroll ID, you can tell the ATO in your STP report if your solution has this functionality. This will help fix issues with duplicate income statements for employees in ATO online services through myGov.

BENEFITS FOR EMPLOYEES INCLUDE:

• It will make it easier for employees at tax time as the ATO will have better visibility of the types of income they’ve received and where it should be pre-filled on their individual income tax return.
• Over time, the new information reported will allow the ATO to tell employees if they’ve provided wrong information that may lead to them getting a tax bill. For example, where an employee hasn’t notified their employer that they have a study and training support loan.

More information can be viewed on the ATO’s official page here – https://www.ato.gov.au/Business/Single-Touch-Payroll/Expanding-Single-Touch-Payroll-(Phase-2)/