The Australian government has previously announced the expansion of Single Touch Payroll (STP) to include additional reporting information. This expansion is known as STP Phase 2.
When processing a payroll on STP Phase 2 an employer is no longer required to forward the employees’ tax file declarations to the ATO separately. Employment and taxation conditions will be automatically reported through STP Phase 2. This includes an employee’s employment basis e.g. full time, part time or casual and additional information from their tax file declaration that was previously not required under STP.
Employers are still required to keep a signed copy of their employees’ signed declarations. These documents can be conveniently and easily stored in CloudPayroll by scanning a copy and adding it to the employee’s documents.
As part of STP Phase 2 the details of when and why the employee leaves the company will now be reported.
Other key changes to reporting through STP Phase 2 include:
- Disaggregation of gross
- Income types
- Country codes
- Child support garnishees and child support deductions
Classification of gross can be easily set up in CloudPayroll. Simply select the relevant earnings type and if there is a need for it to be itemised for tax reporting. Note all allowances will now need to be itemised for STP Phase 2 reporting. These can be set up in CloudPayroll by selecting the category and the other allowance type if the itemised category is other allowances.
For each pay run details of employee’s pay reported via STP Phase 2 will include the type of income for example salary and wages or working holiday maker income. Additionally, the components which make up the pay amount will now be reported i.e. gross pay, paid leave, allowances.
As part of STP Phase 2 additional information will be reported to Services Australia. This will enable them to more easily ensure their customers, some of whom may be your clients’ employees, receive the correct payments. This also removes the requirement for your clients (and their employees) to provide employee information to multiple government agencies.
CloudPayroll is STP Phase 2 ready!