Single Touch Payroll - Phase 2

Single Touch Payroll (STP) reporting became mandatory for all employers from 1st July 2021. STP reporting is now being expanded to include additional information. This is known as Single Touch Payroll Phase 2 (STP2) and will be mandatory from 1st January 2022. STP Phase 2 will reduce the reporting burden for employers who need to report information about employees to multiple government agencies.

STP Phase 2 will be used to streamline employer interactions. Benefits for employers include:

- No longer needing to send employee Tax File Number Declarations. You should still have the employee complete the TFN declaration and keep a copy for your records.

- If you're using a concessional reporting option (such as closely held payees) you'll be able to advise the ATO of this through reporting income types.

- If you make a Lump Sum E payment, you will not need to provide a Lump Sum E letter to your employee as you'll have included the amount and the period it relates to in the STP2 report.

- If you change software or your employee's payroll ID, you can advise the ATO via your STP report, if your chosen software has this functionality. This will help avoid issues such as duplicate income statements available via myGov.

- The ability to share payroll information with Services Australia (E.g. Centrelink) in near real time - saving time for both employees and employers.

- No longer needing to provide separation certificates when employees leave, as these details (date and reason for leaving) will be included in the STP report.

- The ability to voluntarily report child support deductions or garnishees through STP reports.

Key changes of STP2 reporting from the initial STP reporting include:

- Disaggregation of gross income

- Employment and taxation conditions

- Income types

- Country codes

- Child support garnishees and child support deductions

- Reporting previous Business Management Software IDs and Payroll IDs.

Most of the above will already be captured in your current chosen payroll software.

Things that will NOT change include:

- The way you lodge your STP reports

- The due date

- The types of payments that are needed

- Tax and super obligations

- End of year finalisation requirements

If your STP software is ready to start reporting STP2 for 1st January 2021, you should start STP2 reporting from this date.

If your STP software is ready and you can start Phase 2 reporting before 1st March 2022, you'll be considered to be reporting on time and won't need to apply for any additional time.

If you're a Xero user, Xero has secured a 12 month deferral for all partners and customers, so you will not need to start STP2 reporting until 31st December 2022.

DIRECTOR ID - REQUIREMENT FOR ALL DIRECTORS

A director ID is a unique identifier a director applies for once and keeps forever. It will help prevent the use of false or fraudulent director identities.

A person will keep their director ID even if they stop being a company director, change their name or move interstate or overseas. It confirms a director’s identity and will in the future show which companies they’re linked to.

If you are planning on becoming a director or are already a director, you will need to apply for a director ID. We can’t apply on your behalf as the Registrar needs to verify your identity.

When to apply

The dates for when you need to apply, depends on when you become a director.

The first key date is for individuals who become a director between 1 November 2021 and 4 April 2022. They need to apply within 28 days from their appointment.

If you were a director before 1 November 2021, you need to apply before 30 November 2022.

How to apply

It’s free to apply and the fastest way to apply is online. The Australian Business Registry Services (ABRS) has other options available for those who can’t apply online.

Click here to Apply for your director ID.

You will need a myGovID with a Standard or Strong identity strength to apply for a director ID online. If your don’t have the myGovID app then you can set it up at www.mygovid.gov.au/setup

You will also need to verify information held on your ATO record, such as a Notice of assessment. We can assist you with this if you need this information. Once you have this information, the online application is intuitive and takes less than 5 minutes. You will get your director ID instantly.

You then need to give your director ID to the company secretary, and provide a copy to us for our records.

This video can also assist with what is needed.

From 5 April 2022 all directors will need a director ID before they are appointed. Prior to this, the director ID can be applied for within 28 days of appointment.

To find out more about the ABRS, its role in administering delegated ASIC Registry functions and director ID visit abrs.gov.au/about-us.