Did you hear about the Single touch payroll 2? It's a new system developed to make it easier for employers to meet their pay and super obligations!

The Australian Tax Office (ATO) launched Phase 2 of Single Touch Payroll (STP2) in 2022, adding new reporting requirements aimed at easing the load on employers who must file reports with several government entities. These contain additional information regarding gross income, employment and taxes obligations, visibility of different sorts of income and garnishees and deductions for child support.

What are the major changes?

Separating out the gross (Salary Sacrifice agreement)

In STP Phase 2, gross no longer refers to the net sum of a variety of payroll deductions and payments. Gross is now limited to goods that are related to regular-time earnings.

To better enable Centrelink and Services Australia to calculate payment amounts to people or Child Support responsibilities, these expenses will now be reported separately: salary sacrifice, overtime, bonus, commission, and director's fees.

TFN Declarations

Your employees' STP reporting must contain the data collected via TFN declarations. Employers must now compile the TFN, and employment type, and if an employee has HECS-HELP debt; these declarations no longer need to be sent to the ATO.

Allowances

To cut down on errors that were occurring during STP Phase 1, allowances under STP Phase 2 have been expanded to more categories and certain current categories have had their names changed. For instance, "Car" was changed to "Cents per KM."

With the adjustments to allowances, tax and superannuation treatment are now more aligned.

Leave

Paid leave to an employee is a new breakdown under STP Phase 2. As a result, information is now categorized into "Leave Cashed Out" vs. "Other Leave Taken" as well as several categories the government has been interested in regarding Parental Leave & Ancillary Leave.

Need help? Don't worry! Our accountants are here to help you get the most out of single-touch payroll and make sure you're taking advantage of all the new rules and regulations.

If you want to meet with an accountant via Zoom to review and ensure your payroll is ready for STP2, please book your meeting here:

If you use XERO, click here

If you use MYOB AccountRight, click here