As you may be aware, the ATO is expanding the data collected through the Single Touch Payroll process – this is known as ‘STP Phase 2’.
STP phase 2 requires more granular information to be given to the ATO, providing greater visibility of the types of income employees receive (and where it should be pre-filled on their income tax returns). This next level of detail includes salary sacrifice; type of allowances; overtime amounts; and paid leave amongst other things.
The ATO will also exchange this payroll information with Services Australia (Centrelink), in real time.
Target dates for implementation have been set according to the accounting system in use. For clients using Xero, there is an exemption until 31 December 2022. We understand Xero will send instructions soon on how to setup for STP Phase 2, and it will be the responsibility of each organisation to implement changes by 31 December. Other accounting and payroll systems will provide similar instructions.
Purpose will guide our clients through the adjustments needed before the deadline, including payroll setting changes. You’ll hear more from us on this in the coming months. For more information see the ATO website.