Get Ready for Single Touch Payroll Phase 2

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Get Ready for Single Touch Payroll Phase 2

Single Touch Payroll Phase 2 is the culmination of several years of planning and preparation. Phase one saw companies, employees, and the Australian Tax Office getting used to the new system and its benefits. Now, with all of Australia’s businesses on board with the streamlined system, STP Phase 2 is on its way.

Initially, STP Phase 2 was set to rollout on the 1st of January 2022. However, the ATO has offered an extension to those who need a little more time. So, here’s how to get ready for Single Touch Payroll Phase 2, which will now roll out on the 1st of March 2022.

 

Ensure Your Software is STP Phase 2 Compliant

Just as companies had to ensure their payroll software could automatically submit payroll data to the Australian Tax Office, this software again needs to comply with the ATO’s electronic data requirements. Most software producers will make sure their software is STP Phase 2 capable, companies using the software still need to make sure that it works so that they don’t encounter any hiccups. As with the first phase of the Single Touch Payroll rollout, if you are not compliant, you will be subject to penalties. Penalties will increase with time, and they are larger for companies with higher turnover.

 

How is STP Phase Different?

The benefits of Single Touch Payroll Phase 2 lie in a more streamlined tax reporting system. This new rollout ensures reduced redundancies, prevents mistakes, and simplified annual tax reporting for employers and employees alike. The reason is, employers will no longer have to file separate employee tax file number declarations, employment separation certificates, monthly child support deduction reports, payment summary annual reports, and employee payment summaries. As for employees, they will receive more accurate payments, their income-related debt will be lower, changes to their income will be easier to decipher, and they will receive a more equitable debt capacity analysis.

 

Which Information Is Required in STP Phase 2?

The Single Touch Payroll system requires additional information to offer all these new benefits. This extra information gives the Australian Tax Office a complete picture of the finances of employees and employers.

Additional data required:

  • Salary or wages
  • The employee’s tax scale
  • Overtime
  • Commission
  • Bonuses
  • Paid leave
  • Deductions
  • Salary sacrifices
  • Director’s fees
  • Offset amounts
  • Car expenses
  • Travel expenses
  • The basis of employment
  • Reasons for cessation

 

Consider New Payroll Software

Whether your business has grown, or you simply are no longer satisfied with your payroll software, now is the perfect time to look for a software upgrade. The ideal software will offer a range of payroll features and reporting options, along with ATO compliance. Software such as Tencia gives the payroll administrator the flexibility to prepare their payroll in the way which suits them. With features such as bulk pay updates, superannuation calculation, generate PAYG payment summaries, and the ability to process various payroll cycles, Tencia is a comprehensive payroll package that is perfect for those in need of an upgrade.

Complying with the new Single Touch Payroll Phase 2 regulations will be easy and stress-free with the right payroll software. If you’re thinking of moving to a different payroll software package, why not look at what Tencia has to offer. Tencia will make it even easier to get ready for Single Touch Payroll Phase 2.

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