Employers have now been reporting their payroll data electronically to the ATO as Single Touch Payroll data for some time. For larger employers this applied from the 2019 financial year whereas many smaller employers had a delayed start in the 2022 year. Regardless of size everyone’s now fairly comfortable with the system & process for regularly reporting employee wages, PAYG Withholding & Superannuation data to the ATO.
As of 1st January 2022 the ATO expanded Single Touch Payroll (STP) reporting to receive more detail regarding the type of employment arrangements, taxation information, and a more detailed breakdown of payments into gross wages, paid leave, allowances, overtime, bonuses, lump sums and salary sacrifice.
The issue has been that many software providers weren’t able to add the additional functionality by the 1st January 2022 start date and have been operating under a deferral arrangement with the ATO while they have been rolling out upgrades to software.
Of the more common payroll software providers Quickbooks has been largely operational since February 2022. WageEasy, Micropay, MYOB AccountRight and MYOB Essentials obtained deferrals until 1st January 2023. Xero has a deferral until March 2023, and Reckon until 30th June 2023. Some providers have updated their existing software with new functionality whereas others are migrating customer files onto a whole new platform. Depending on your payroll software some of these updates may have occurred behind the scenes without your awareness, or you may have at been prompted to review settings and enable new features as they’ve become available.
As most software providers are now well progressed into the STP 2 transition now is a good time to review your software to ensure you’ve made any available STP 2 updates. You should review all employees to ensure details & classifications are complete. You should also review the types of income, leave and superannuation categories used in your system to ensure they have relevant STP 2 classification settings linked. Also keep an eye out for further communications from your software provider, and for messages or checklists issued within the payroll software prompting you to take action or enable new features. Further detailed information and assistance can be found on each providers website.
By staying on top of progress into STP Phase 2 you can be confident you are meeting the new ATO STP Phase 2 employer obligations, can avoid last minute headaches as deadlines approach, and can instead focus on the more important matter of running your business.
Contributed by Kyra Gonsal.