STP 2 - Part 1

All businesses now need to be making the major transition to the stage 2 of Single Touch Payroll (STP), otherwise known as STP2.

Most businesses would know how to comply with STP1, the ATO initiative designed to streamline the reporting of employee pay, tax withheld and superannuation

STP1 was introduced in 2018 for large businesses and extended in 2019 to small businesses.

With STP1, employers reported employees' payroll information to the ATO each time it was paid through STP-enabled software. Payroll information included:

·       salaries and wages

·       pay as you go (PAYG) withholding

·       superannuation

STP2, which came into effect on 1 January 2022, requires businesses to report additional information..

STP2 ostensibly aims to reduce employers' reporting burdens to government agencies. However, it also assists in reduced reporting requirements to different government agencies.

Basically, it creates a system where all relevant information is reported through the payroll system. This allows government agencies to collect this information directly from the ATO. STP2 aims to reduce reporting burden for employers who need to report information to multiple government agencies.
 

One of the primary examples of this information sharing between agencies is with Services Australia, formerly known as CentreLink. For instance, STP2 allows Services Australia to confirm child support deductions without a separate report to be required. It will help Services Australia’s customers, who may be employees of the business, get the right payment at the right time.