The time has come for us to get into the nitty gritty of Single Touch Payroll (STP) Phase 2. What is Single Touch Payroll? If you missed the memo, Single Touch Payroll or STP, is a process of electronic data reporting that Australian businesses use to share data with the Tax Office. If you have STP-enabled payroll or accounting software, it easily sends the ATO vital reports on things like salaries and wages, pay as you go (PAYG) withholding and superannuation liability. The STP process began a few years ago and the reporting items have been expanded for mutually beneficial reasons. Below we’ll discuss some of the critical changes for phase two of STP. Does knowing about STP 2 matter to you?
If you have already engaged Preston Corporate Accounting to process Single Touch Payroll on your behalf, you’re all set. We’ll take care of the Phase 2 process for you. The details below are just for your information. For those clients that prepare their payroll themselves, we hope this article is helpful. Please remember that we are here for you as a resource if you need assistance at any time. Phase 2 has already begun The purpose of STP’s second phase is to provide the different government departments with more detailed and current information to help improve the delivery of government services. The adoption of STP 2 is a compulsory government requirement and came into force on the 1st January 2022. However, users of Xero have until the 31st March 2023 and MYOB had an extension to the 31st December 2022. In summary, your accounting or payroll software (Xero, MYOB or QuickBooks) will provide you with the structure needed for the data input. However, you will need to increase your payroll skills to ensure the data you enter is correct. So many labels and codes! There are now many labels and codes to input for each employee. Understanding these codes is important; it will affect the employees’ government benefits and income tax basis. This includes things like child support and Services Australia entitlements. There are 86 codes to choose from and it is important that you choose the right one for each employee. There are quite a lot of labels and codes that need to be correctly selected to properly process payroll under STP 2. Here is the list:
STP 2 implementation checklist If we aren't processing your STP, it is important that you approach the implementation of STP 2 in a structured manner and follow a checklist like the one below.
Click on your software below for information to help guide you through the process: Xero MYOB Quickbooks Where to from here? Don’t panic! Help is at hand. Now is the time to get an understanding of, and more detail on STP 2. Don’t wait until the last minute as there may be penalties. Your payroll software will determine the commencement date, so ensure you are on top of their progress. Our bookkeepers will be available to assist you in your setup, so don't hesitate to call us on (08) 9367 4199 if you need to. Comments are closed.
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