Key Points

• Mandatory STP Phase 2 reporting commences in January 2022
• Government aims to reduce the reporting burden for employers who are currently required to provide employee information to multiple government agencies.

Full Article

The ATO have confirmed that mandatory STP Phase 2 reporting is set to commence from 1 January 2022.

The expansion of STP will see additional information required to be reported each payday.  STP Stage 2 builds on the basic salaries and wages information reported today, through the original STP regime which began in 2018. 

The aim is to reduce the reporting burden for employers who are currently required to provide employee information to multiple government agencies by increasing the number of data items that will be reported moving forward.

Employers will be required to itemise the various components which make up the employees gross salary, including: bonuses and commissions, directors fees, paid leave, salary sacrifice, overtime, allowances, salary-sacrificed amounts and further, any lump-sum payments needs to be broken down into categories.  Income types and country codes also need to be reported, making it easier for employees to complete their individual income tax returns.

Employers will also need to report whether an employee is on a full-time, part-time or casual employment basis, the tax treatment for PAYG purposes, and the reason for separation when employees leave.

Employers will also be able to provide the ATO with previous Business Management Software IDs and Payroll IDs where there has been a change in software or business structure, to ensure the ATO can fix issues with duplicate income statements for employees in ATO online.

In order to bring this into effect, the ATO is presently working with software providers to update STP-enabled software.  Employers will need to wait for their software providers to provide instructions about anything they need to do to ensure the software product can report STP Phase 2 requirements. “It’s important to remember that all STP-enabled solutions have different functions and updates for the expansion will be offered in different ways,” the ATO said.

Employers can view the ATO’s latest guidance and fact sheet on STP Phase 2 here. 

If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.