Published
Social
Sharing
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Expanded Single Touch Payroll Phase 2

What is Single Touch Payroll Phase 2?

In the 2019–20 Budget, the Government announced that Single Touch Payroll (STP) would be expanded to include additional information.

The expansion of STP, also known as STP Phase 2, will reduce the reporting burden for employers who need to report information about their employees to multiple government agencies. It will also help Services Australia’s customers, who may be your employees, get the right payment at the right time.

All Cashbook customers have been approved for a deferral!

To support the implementation of STP Phase 2 the ATO has allowed many software providers a flexible, reasonable and pragmatic approach based on our business needs and readiness. 

Practical Systems has been approved an extension for all of our Cashbook customers that utilise our payroll system.  There will not be any penalties for Practical Systems or our customers in the first year of Phase 2 reporting until 31st December 2022.

If for any reason the ATO contacts you about your Single Touch Payroll Phase 2 commitments, all you are required to do is advise them that you are covered by a federal and to quote the below number.

ProductDeferral Reference Number
Cashbook68 934 907


What are the benefits of STP Phase 2

Benefits for employers

We’ll use the STP2 information to streamline employer interactions. For example:

  • You’ll no longer have to send us your employees’ TFN declarations. Your employees will provide it to you, and you’ll need to keep it with your 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.
  • If you make a Lump Sum E payment, you won’t need to provide Lump Sum E letters to your employees. You’ll have included the amount and the period it relates to.
  • If you change software or your employee’s payroll ID, you can tell us in your STP report if your solution has this functionality. This will help fix issues with duplicate income statements for employees in ATO online services through myGov.

We’ll also share payroll information you report to us in near real-time with Services Australia. They’ll use it to streamline requests:

  • for you to provide or confirm employment and payroll information about your employees
  • from your employees to provide employment and payroll information such as payslips for prior periods.

You may no longer need to provide separation certificates when your employees leave. The date and reason an employee leaves will be in your STP report.You can also voluntarily report child support deductions and/or garnishees through STP. This reduces the need to send separate remittance advice to the Child Support Registrar.

Benefits for employees

Some changes under Phase 2 will help us streamline interactions for employees, such as:

  • We’ll make it easier for employees at tax time as we’ll 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 us to tell employees if they’ve provided you with incorrect information that may lead to them getting a tax bill. For example, where an employee hasn’t notified you that they have a Study and Training Support Loan.

We’ll also share STP information with Services Australia so they can streamline interactions with their customers. Over time, they’ll use STP data to improve their services by:

  • prefilling details they already know – saving their customers time filling out claims and reports
  • reducing how often they’ll need to contact customers – STP will give them some information that they currently need to confirm by phone or online
  • streamlining claims – their customers won’t need to supply as many documents
  • enhancing Family Tax Benefit processes – by sending SMS and email messages to their customers when
    • STP data shows their family income estimate may be too low
    • they have a new job
    • their employment has changed.
  • helping them pay their customers the right amount
  • using STP information to improve the customer experience if a customer has debt to pay. STP information allows Services Australia to understand their customers’ recent employment and income history – this helps them assist customers to repay any money owed.

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:

  • the way you lodge
  • the due date
  • the types of payments that are needed
  • tax and super obligations
  • end of year finalisation requirements.

For more information, please visit the ATO website – Click Here

WHAT DOES THIS MEAN FOR OUR CASHBOOK CUSTOMERS

  1. We are working on delivering you an updated version of Cashbook in early 2022. This version will comply with the new STP Phase 2 requirements set by the ATO.
  2. You can continue to report and use the existing functionality in Cashbook to report your STP requirements as and when required.
  3. If the ATO contacts you at any stage about your STP submissions, all you need to do is advise the ATO representative that you are covered by a deferral and you must provide them with this code.  

    ProductDeferral Reference Number
    Cashbook68 934 907

4. If you have any further questions please contact the support team via email support@practicalsystems.com.au