Important Update – Single Touch Payroll 2.0 Rollout and Deferral Announcement

As you may be aware legislation has been enacted to expand Single Touch Payroll (STP) to include additional employee and pay information. These changes are due to come into effect as of January 1st, 2021, and significantly impact most levels of data capture within payroll, including employee records, payment types and each processed pay run. Part of STP 2.0 includes numerous changes to the reporting data structure that software uses in its submissions to the ATO through the STP gateway.

The ATO acknowledges there is significant work involved for all parties in complying with the new legislation and has provided avenues to ease this burden on both software developers and employers.

The ATO suggests

“We’ll support employers by making the transition to STP Phase 2 reporting flexible, reasonable and pragmatic. Where employers can start reporting from 1 January 2022, we will support and encourage them to do so.

Employers whose solution is ready and can start reporting the expanded data by 1 March 2022 will be considered to have started on time. There is no need to apply for more time.
To be clear, the mandatory start date remains 1 January 2022, this approach is to allow some flexibility to those employers who need it.

DSP (Software provider) deferrals are available if their solution/s will not be ready, and this deferral will cover their clients. We have already received a number of deferral requests, and expect to be in a position to respond to those requests in the next few weeks.
There is no need for employers to apply for more time where they are covered by their product deferral.  For any employers that need more time, an online tool will be made available in December 2021. Penalties will not be applied for honest mistakes made during the first year of reporting the expanded data. This will cover transitions until 31 December 2022, and include employers who have already started STP Phase 2 reporting.”

Arrow also understands the work that lies ahead for both ourselves and employers using our products and have made concerted efforts to make employers’ lives easier throughout the STP 2.0 roll out. Arrow will release a new version of Tencia (2021.3) in the coming weeks with enhancements to the data capture programs within the payroll module. Documentation will accompany this release to assist you in the preparation for STP 2.0. Tencia 2021.3 will only be available to Tencia clients with an active ESP policy.

While STP 2.0 submissions will not occur until sometime in the new year, employers can commence restructuring and classifying their employee and payment types in preparation for the new reporting categories within the remaining 2021 calendar year.

While employers are doing this Arrow Research will be working through the ATO testing process to ensure the validity of the new dataset for STP submission. Further updates to Tencia will be issued after ATO approval is provided which then would allow Tencia 2021.3 to submit STP data in the new format. Arrow also understands there are additional factors affecting employers’ ability to meet the nominated January 1st submission date, for this reason Arrow has worked together with the ATO to secure Deferrals for Tencia STP 2.0 Implementation until the first pay after 31st March 2022.

The Tencia Deferral notice was provided by the ATO to distribute to our clients as evidence of this deferral. The letter explains what the deferral means to you and what your STP 2.0 obligations are under the deferral arrangement.

We suggest you contact your Tencia business partner in the coming weeks to discuss your Tencia 2021.3 upgrade which will allow you to begin the process of updating employee and payment type records with the additional information that is now required. We will also keep you updated on our progress throughout the ATO STP 2.0 testing and approval process.