Single Touch Payroll (STP) – Phase 2

Different components of pay are treated differently by various laws – for example, overtime is treated differently for superannuation guarantee purposes, whereas some kinds of leave are treated differently by Services Australia when determining an individual’s entitlements within the social security system. Reporting the disaggregated income means these components can be identified and treated correctly.

Yes. These changes will apply to STP reporting for all employees.

From the date you commence reporting this information using STP Phase 2.

Annual leave and sick leave are reported separately as Paid Leave. Paid public holidays are not reported separately from ordinary wages.

Employers running payroll and submitting STP reporting early to cover the holiday period do not need to report those pays using STP Phase 2. Unless covered by a deferral which allows for a longer time, employers can transition to STP Phase 2 reporting at any time before 1 March 2022.

As STP is year-to-date (YTD) reporting, generally on transitioning to STP Phase 2 employers should commence reporting the full year YTD figures for each disaggregated component. Many products already capture the data this way and will provide instructions about how to transition. In some cases, the full YTD figures may not be available. The ATO is not expecting employers and agents to reconstruct pre-STP Phase 2 periods with new information or where the data is not available. For more information, if full year-to-date data is not available, please visit the ATO website.

STP reporting requirements don’t prescribe the general ledger codes to be used. Your digital service provider may be able to provide further information on how to customise the chart of accounts and general ledger reports.

Directors’ fees are specifically included in STP reporting and need to be reported separately in STP Phase 2.
Visit the ATO website for more information on the reporting of directors’ fees.

As PAYGW for directors’ fees is calculated using the same tax scale as for ordinary workers, the tax treatment code will be based on the TFN Declaration they have provided you, identifying whether they are claiming the tax-free threshold, have a study and training support loan, etc. This means – in most cases – the tax treatment code will begin with R (if they have provided a TFN declaration) or N (if they have not and you are withholding at the highest marginal tax rate).

The requirement is to report on or before the day a payment is made, regardless of frequency. This means if a payment is made weekly, reporting is required weekly, or if payment is only made annually, reporting is required annually.

No. STP law requires reporting on or before the date of each payment.

The requirement for STP reporting is to report on or before the day a payment is made, regardless of frequency. A concessional approach for payers with closely held payees provides for more flexible reporting in some circumstances. See this ATO information on closely held employees and STP.

If you are paying overtime, then you must report it as overtime in STP Phase 2. If you need assistance understanding when to pay overtime and how to calculate it, you should seek advice from the Fair Work Ombudsman or a relevant professional specific to your circumstances.

Payers with closely held payees have been required to report through STP since 1 July 2021 and will be required to transition to STP Phase 2 along with all other employers.

All employers have been required to report using STP since 1 July 2019, regardless of how many employees they have, unless they have applied to the ATO and been granted an exemption. All employers will be required to transition to STP Phase 2.

The ATO publishes a list of no cost and low cost STP solutions. While the ATO takes all reasonable care to ensure information provided on this list is accurate, changes in circumstances may occur after the solutions are released. The ATO does not recommend or endorse any of the products listed on this register.

The ATO does not publish a list of deferred due dates by provider. You should talk to your provider about whether they have a deferral which applies to the product you use.

ATO webinars, including the one covering allowances are available on the ATO website.

The ATO is currently working towards this and will continue development of this functionality in 2022.

Not at this time.

Yes. There are no changes to existing superannuation processes and requirements as a result of STP Phase 2.