The good news is that the Australian Tax Office (ATO) has listened to the payroll developers and accounting bodies requests for a deferral of the 1st July 2021 compliance date for STP Phase 2.
The new compliance date is 1st January 2022; this means software developers and business owners have another six months to prepare for STP2.
This may require changes to your payroll system’s configuration and additional employee data security collection processes.
What does it mean for your business?
While this will vary based on your payroll software or service provider, you may need to capture additional information from your employees if you don’t have this on file already.
Due to payroll’s sensitive nature, you may need to introduce additional security controls and revise confidentiality agreements with key payroll staff. Further, you may need to educate your team on why you need more details (see ATO summary below). On the plus side, TFN declaration forms will no longer be required and reduced reporting to other government agencies, saving you time overall.
As per the ATO, Key features are.
Key benefits and features of STP Phase 2 include:
reducing the duplication of information employers provide to Government which will also reduce unnecessary interactions including
- incorporating the reason for an employee ceasing employment to minimise the need for separation certificates
- reporting child support garnishee and deduction amounts voluntarily through STP instead of through the separate manual remittance process
- removing the need to send tax file number and withholding declaration information to the ATO – this will now be captured in the employment conditions section of the STP report
better defining the components that make up gross income that will
- make it easier for employers to understand their obligations
- help employees understand their earnings and help them with their interactions with Services Australia
- ensure consistency of reporting across the various income types.
reporting employee payments by income type (or income streams) including
- salary and wages
- foreign employment income
- closely-held payees
- working holidaymaker.
Our clients won’t need to do anything further since our system already handles this information. However, it might be worth checking in with your payroll software provider or payroll service provider to see their plan. While there are concessional reporting options for some employers available, the message is clear start getting ready now.
If you are not a current client and would like to book a strategy session, so you are ready for the new deadline or want to know the right questions to ask, please contact us.
ATO Link : ATO STP Phase 2 for more information.