STP Phase 2 Reporting Extended
STP Phase 2 reporting deadline is fast approaching. If you’re worried your business won’t be able to start its Single Touch Payroll (STP) Phase 2 reporting by the deadline on 1 January 2022, there’s good news.
The Australian Taxation Office (ATO) has taken a flexible approach based on business owners’ readiness and individual circumstances. The ATO acknowledged that the introduction of Single Touch Payroll Phase 2 may come at a busy time for employers and their tax agents.
STP Phase 2 is an expansion of the payroll data the ATO collects from employers. It requires software providers to update employers’ existing STP-enabled software.
The ATO says that, because employers are reliant on these providers to be able to start reporting, it’ll be taking a “fair and flexible approach during the roll-out”.
“The first step,” says Commissioner of Taxation Chris Jordan, “is to check whether [the employer’s] software provider has been given a deferral [by the ATO].
“If the software is ready to go by 1 January, then as long as [the employer] can start reporting by 1 March 2022, they will be considered to have started on time and don’t need to apply for a deferral.
“If a software provider has been granted extra time, this will apply to their customers as well.
“Employers can apply for individual deferrals from December this year. We will be flexible and reasonable with the transition.”
Benefits of STP Phase 2
STP Phase 2 will reduce the reporting burden for employers who need to report information about their employees to multiple government agencies.
It’ll also help streamline welfare services (e.g., child support, family tax benefit).
More exactly, STP Phase 2 will:
- reduce the duplication of information employers provide to the government, which in turn will reduce unnecessary interactions,
- remove the need to send tax file number and withholding declaration information to the ATO,
- better define the components that make up gross income, and
- report employee payments by income type (or income streams).
STP Phase 2 is a big move towards an easier complete digital recording and reporting. Reviewing the STP Phase 2 reporting guidelines may help understand what is required and what you need to do to get ready on or before 1 March 2022.
Get expert advice
If you’ve only just gotten your head around STP reporting and aren’t sure how to deal with Phase 2, we can help.
As registered tax agents, we can process and report your payroll information for you and, if necessary, apply for an STP Phase 2 deferral on your behalf.
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