Single Touch Payroll Phase 2 Deferral

The ATO has just announced a deferral for the commencement of Single Touch Payroll Phase 2.

Employers who were previously required to begin Phase 2 by 1 January 2022, now have until 1 March 2022 to meet their updated reporting obligations.

The rollout of STP Phase 2 will be largely driven by the payroll and accounting software you use. Please check in with your software provider to ensure you will be meeting your new obligations by the required date.

Benefits of STP Phase 2 for employers include:

  • You will no longer have to send employees’ TFN declarations to the ATO (though you will have to keep them with 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 tell us through reporting income types
  • You won’t need to provide Lump Sum E letters to your employees
  • If you change software or an employee’s payroll ID, you can tell the ATO in your STP report which will help fix issues with duplicate income statements
  • You may no longer need to provide separation certificates when your employees leave as the date and reason will be in your STP report

Benefits of STP Phase 2 for employees include:

  • It will be 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 an employer with incorrect information that may lead to them getting a tax bill (e.g. where an employee hasn’t notified you that they have a Study and Training Support Loan)
  • The ATO will also share data with Services Australia to streamline their interactions with customers and ensure they are being paid correctly

Please note that there won’t be penalties for genuine mistakes for the first year of Phase 2 reporting until 31 December 2022.

Please get in touch if we can help explain this, or help you get set up for STP Phase 2.