Jan 24, 2023
From 1 July 2019, STP became mandatory for all businesses that withheld PAYG contributions for employees or contractors and Single Touch Payroll Phase 2 (STP2) is a continuation of this and remains compulsory.
Unless you have an exemption or deferral, you will need to start transitioning to STP if you have yet to do so. The mandatory start date for Singly Touch Payroll Phase 2 (STP2) reporting is 1 January – however, the date is flexible not to add further burden to employers. Check what the date with your payroll software is. Xero, for example, has an exemption until 31 March 2023.
For example:
In STP, if your employee earns $20,000 in wages and $1000 in overtime, you report this as $21,000 gross.
In STP2, you report the employee’s earnings as $20,000 in wages and $1000 as overtime. You can see detailed examples on the ATO website.
What is still included in gross payments:
Annualised Salary
If you have employees with annualised salaries, the requirement is to split the annualised salary into each of its components. This may include
Income types
To give more flexibility in the ways in which you pay employees, in STP2, employers must:
Tax file number declaration
Employers are currently required to submit a TFN declaration to the ATO. STP2 will incorporate the employee’s tax details via STP reporting instead of submitting separate documents to the ATO.
Termination reason
It will be mandatory to specify a reason for an employee’s termination in STP2.
Separation Certificate
The introduction of the termination reason will mean that employers will no longer have to provide a separation certificate in most cases.
Paid leave
As part of the changes in reporting income, paid leave will no longer be included as part of the gross earnings when reporting via STP.
Most paid leave will be allocated under Leave type “O” in STP2.
Allowance types
Previously, some allowances have been able to be reported as gross income. In STP2, all allowances will have to be reported separately in most income types.
Although these changes sound like more work for the employer, most businesses will already be transitioning to STP2. Software such as Xero and MYOB have already integrated the changes to help make the transition as smooth as possible.
There are quite a few changes in single touch payroll phase 2 that we, as a business, are also trying to wrap our heads around. If you need further assistance, please talk to your bookkeeper or accountant.
Guides to help you uncover human resource insights, and make the right changes to improve team delight.
Amelie is our Marketing Lead and currently studying for a B.A. in Business and Visual Arts. She brings her visual arts skills and eye for colour and detail to our graphics and design for the business.
Amelie uses her skills as a digital native in our Marketing team and works across our social media channels. Amelie provides administrative support and assists the recruitment team in finding great candidates.
Sarah joins the team at Total HRM following her time in a regional real estate company, most recently in HR. She brings a solid understanding of the unique dynamics and challenges within small and medium-sized businesses.
Prior to real estate, Sarah worked in the airline industry, providing her with excellent skills in customer service and how to remain calm in a crisis.
Known for her positive energy, Sarah approaches her role with enthusiasm and a genuine desire to support and uplift those she works with. With her experience in HR and recruitment, Sarah is committed to fostering a culture of inclusivity, professional growth, and employee well-being. Her ability to connect with people and create a positive work atmosphere contributes to the overall success of teams and the business as a whole.
Ashly is one of our most experienced HR Business Partners with over 20 years of experience in manufacturing and hospitality, both local and overseas, ranging from large multinational companies to small family-owned operations. Throughout his career, Ashly regularly led teams with over 30 employees while continually growing the business and aligning business strategies with employee capabilities.
Ashly has qualifications in Applied Management and Human Resources and a strong leadership and people management background. Ashly combines his experience with his qualifications to develop great workplace cultures while delivering practical support.
As our Business Services Manager, David keeps everything that is Total HRM ticking along – from overseeing administration and finance functions, liaising with clients and suppliers, to IT troubleshooting and keeping everyone on track to deliver effective customer service to all our clients.
In a business landscape of ‘information overload’, Kim’s pragmatic approach simplifies the ever-changing HR trends and legislation to obtain meaningful and maximum benefits for her clients.
Kim is well known for her ability to understand the ‘real’ issues within businesses and to provide solutions for sustained business growth.
Kim has over 20 years of experience in human resources and 15 years of business consulting experience, and she holds post-graduate Business and Human Resource qualifications.
She has vast and varied experience in senior consulting roles across varying disciplines and HR management positions within retail, manufacturing and professional service sectors.
Linda is the Managing Director of Total HRM and has worked for over twenty five years in business and consulting, including executive and senior management roles. She has worked here and overseas in numerous industries, including mining, energy and government. Her experience in areas such as production, strategic planning, finance, OHS/WHS, and lecturing in Human Resources Management at La Trobe University provides her with a unique blend of business and HR capability.
Linda has led comprehensive organisational restructures and implemented programs to improve the effectiveness of businesses with clear alignment between individuals’ contributions and organisational outcomes. She works with various local boards and executive teams in the region. She is a Certified Professional Member of the Australian Human Resources Institute.