Single Touch Payroll Phase 2

Streamlined reporting information about employees to government agencies.

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, reduces the reporting burden for employers who need to report information about their employees to multiple government agencies. It helps Services Australia’s customers, who may be your employees, get the right payment at the right time.

Flexible approach to STP Phase 2

To support employers, the approach to STP Phase 2 is flexible, reasonable and pragmatic based on your business readiness and individual circumstances.

Digital service providers (DSPs) who need more time to make the changes and update their solutions to support STP 2 can apply for a deferral for their customers. If your DSP has a deferral, they will let you know.

If you can start reporting by your DSP’s deferral date, you don’t need to apply for more time.

Requesting more time to transition

If you need more time to transition to STP Phase 2 reporting, you can:

• apply for more time past your DSP’s deferral date
• have your registered agent apply for more time on your behalf.

For more information about applying for a delayed transition, see STP expansion (Phase 2) delayed transitions.

There won’t be penalties for genuine mistakes in your first year of STP Phase 2 reporting.

Benefits of STP Phase 2

Benefits for employers

• STP Phase 2 information will be used to streamline employer interactions
• Payroll information you report will also be shared in near real-time with Services Australia. They’ll use it to streamline requests
• 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 or garnishees (or both) through STP — this reduces the need to send separate remittance advices to the Child Support Registrar.

Benefits for employees

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

• Making it easier for employees at tax time now with better visibility of the types of income received and where it should be pre-filled on their individual income tax return
• Over time, the new information reported will allow the ATO to tell employees if they’ve provided you with incorrect information that may lead to them getting a tax bill
• STP information will also be shared with Services Australia so they can streamline interactions with their customers.

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.

Most of the additional information you need to report should already be captured in your current payroll software.

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