Andrew Young
December 5, 2022
As the calendar year end is approaching us quickly so is the Australian Taxation Office Phase 2 Compliance. We understand this can be a daunting task, to assist our Corporate Managed Services team has included key information below to guide your transition for STP Phase 2.
What is STP Phase 2?
Single Touch Payroll (STP) is an Australian Government initiative to reduce employers’ reporting burdens to multiple government agencies. It became a mandatory obligation for all businesses with payroll on 1 July 2019.
STP Phase 2 is a continuation of this initiative, for which businesses are required to report additional information via STP. This aims to streamline the different income assessments required by government agencies.
To ensure you are meeting the requirements for STP Phase 2, you will need to review and update pay items, including pay codes and categories to disaggregate gross income. You may also need to enter additional employee details into the payroll system.
What you need to action with your DSP
To get ensure you are meeting the requirements for STP Phase 2, two key areas of focus with your DSP are pay items and employee details. These fields must be reviewed and actioned before the deferral date.
Most payroll software providers have published information detailing the steps required to prepare for STP Phase 2, as they may differ depending on the software. The steps will need to be followed carefully to ensure the correct information is reported to the ATO after the deferral date. If you require assistance, our team is accustomed to the processes required for different DSPs.
STP deferred start dates for Digital Service Providers
The mandatory start date for STP Phase 2 was 1 January 2022, however most payroll software, or Digital Service Providers (DSP) received deferrals as they needed more time to upgrade their products. The STP Phase 2 deferral dates are approaching or have expired for the following providers:
| Digital Service Provider (DSP) | Deferral Date |
|---|---|
| MYOB | 1 January 2023 |
| Xero | 31 March 2023 |
| Quickbooks | Deferral expired February 2022 |
| Keypay | Deferral expired March 2022 |
| Other software | 1 March 2023 |
Potential penalties for missed STP reporting
Business owners must comply with STP Phase 2 or potentially face penalties from the ATO. Penalties for late or missed STP reporting start from $210 per day for every 28 days your report is overdue, to a maximum of:
– $1,050 for small businesses
– $2,100 for medium entities
– $5,250 for large entities and $525,000 for global entities.
How we can help with your STP Phase 2 requirements
Our Corporate Managed Services team is currently assisting clients with STP Phase 2 requirements. If you are looking for a hands-off, efficient process to meet your STP Phase 2 employer obligations, please do not hesitate to contact your advisor, or the Corporate Managed Services Team at DFK Gooding Partners.
Contact Corporate Managed Services
cms@dfkgpca.com.au / (08) 9327 1777
Alternatively, complete our quick contact form below and our team will be in touch to discuss your requirements.
