The expansion of STP is intended to reduce reporting burdens for employers who need to report information about their employees to multiple government agencies, as well as streamlining tax compliance for employees.
The way you lodge and the due date of your STP reports remain unchanged. STP Phase 2 means changes to the way you report some information, including:
Disaggregation of gross
Under Phase 1, the STP report included a gross amount paid to employees. These payments must be reported in more detail under STP Phase 2. You will now be required to separately report gross wages, paid leave, allowances, overtime, bonuses and commissions, directors’ fees, lump sum W and salary sacrifice.
Employment and tax conditions
Previously, information about employee’s employment basis (full time, part-time, casual), TFN declarations and termination reasons were reported through various forms. Under STP Phase 2, this information will be included in your STP report.
You will need to advise the nature of income earnt, for example, whether a payment is regular salary or income for working holiday makers.
You may need to report a country code and information about host countries and home countries when you make payments to employees whose income type is foreign employment income or working holiday maker.
Child support garnishees and child support deductions
Phase 2 provides the option to include this information in your STP report, reducing the need to give separate remittance advices to the Child Support Registrar.
STP Phase 2 reporting is mandatory from 1 January 2022. However, the ATO has advised they will have a flexible approach to the transition so if you are reporting before 1 March 2022, you will be considered to be reporting on time.
Some digital service providers have already been granted extensions. For all clients who use the following programs for STP reporting, you have automatic extensions to these dates:
- MYOB – 1 January 2023
- Xero – 31 December 2022
- Reckon – 1 January 2023
If you need any assistance in complying with the requirements under STP Phase 2, please contact our office.