Home / Blog / What You Need to Know About STP Phase 2
What You Need to Know About STP Phase 2
Author: Nirmit Desai, Consultant
Published: 19th April 2022
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 will also help Services Australia’s customers, who may be your employees, get the right payment at the right time.
STP Phase 2 improves the visibility of payroll data, reducing manual processing and duplicate processes. The mandatory start date for Phase 2 reporting was 01/01/2022, however Scope Systems customers using the Pronto Xi Payroll module have a deferred start date of 01/01/2023.
What this Means for You
If you are one of our customers using the Pronto Xi Payroll module then you are covered by the deferred start date (01/01/2023), providing you keep using the Pronto Xi Payroll module covered by the deferral. The deferred start date covers you up to the last possible payday within the deferral period granted. The deferral period allows you time to transition to the new Single Touch Payroll Phase 2 reporting requirements.
It is important for you to work through all the steps necessary for moving from the way you are currently reporting payroll – to being ready and able to report as required for STP Phase 2. If you will not be ready by the end of the deferral date and need additional time to get your systems ready then you will need apply for your own deferral separately.
STP Phase 2 Key Changes
Most of the additional information you need to report should already be captured in your Pronto Xi Payroll screen.
The key changes to the STP report include:
- Disaggregation of gross
- Employment and taxation conditions
- Income types
- Country codes
- Child support garnishees and Child support deductions
- Reporting previous Business Management Software IDs and Payroll IDs
Key Dates
There are a few key dates to keep in mind during the transition to STP Phase 2:
- STP Patches will be received by the second week of July.
- STP Patch will be released for V760 only and then lower versions (earliest version patches will be V730 and above).
These lead times will give you time to test and ensure you have the processes in place for STP Phase 2 reporting when the deferral ends. If you are using an earlier version of Pronto Xi from 670 to 720 – you will need to upgrade as STP Phase 2 will not be supported on these versions.
What you Need to Do
There are a few tasks you can do to get ready for STP Phase 2, these include:
- Updating historical data.
- Review Pay code settings.
- Ensure your existing processes can be completed with the new STP Phase 2 patches in place.
One of the key tasks you will need to do to get ready is familiarising yourself with the main changes to the Pronto Xi Payroll screens, particularly the Pay code screen in the ATO reporting section. You will need to check your pay code settings before you begin to report under STP Phase 2. Under the STP Phase 2 changes the pay codes are classified into categories, another change is that you will need to report allowances separately across most income types.
These upcoming changes will be included in the STP Phase 2 patches being received by the second week of July. We will work together to set aside time for software reconfiguration and your own testing. We will be in contact with you to organise the deployment of these patches, working with you to ensure your team has enough time to get prepared for the changes.
To make your switch to STP Phase 2 as smooth as possible it is important for you to familiarises yourself with the upcoming changes to your Pronto Xi Payroll environment and ensure that your current processes can accommodate the extra reporting requirements. If you have any questions or concerns about transitioning to STP phase 2 please get in touch with your account manager.
For additional information see the links below:
ATO STP Phase 2:
https://www.ato.gov.au/Business/Single-Touch-Payroll/In-detail/Single-Touch-Payroll-Phase-2-employer-reporting-guidelines/
Changes to Pronto Xi Payroll Screen:
https://www.youtube.com/watch?v=bQCZG3CxKtc
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