17 Mar 2022
ATO Expanding Single Touch Payroll Phase 2
The government announced in the 2019–20 Budget that Single Touch Payroll (STP) would be expanded to include more information.
The expansion of STP, also known as STP Phase 2, will reduce the reporting burden for employers who must report employee information to multiple government agencies. It will also assist Services Australia’s customers, who may be your employees, in receiving the correct payment at the correct time.
Benefits of STP Phase 2 for employers
- You will no longer be required to send the TFN declarations of your employees to the government. It will be provided to you by your employees, and you must keep it with your employee records.
- You’ll be able to tell the government if you’re using a concessional reporting option, such as for closely held payees or inbound assignees, by reporting income types.
- You will not be required to provide Lump Sum E letters to your employees if you make a Lump Sum E payment. You’ll have included the amount as well as the time frame.
- If you change your software or your employee’s payroll ID, you can notify the government in your STP report if your solution has this capability. This will assist in resolving issues with duplicate income statements for employees in the ATO’s online services.
Benefits for employees
- Employees will have an easier time filing taxes because the government will provide them with a better understanding of the types of income they have received and where it should be pre-filled on their individual income tax returns.
- Over time, the new information reported will allow the government to notify employees if they provided incorrect information, which may result in them receiving a tax bill. For example, if an employee has not informed you that they are the recipient of a Study and Training Support Loan.
What isn’t changing
While you’ll need to report additional information in your STP report, there are many things that will stay the same, such as:
