Single Touch Payroll (STP) Phase 2: What Your Business Will Have to do to Comply and How YML can Help

YML offers your business YML’s specialist Australian-focused Bookkeeping Service via Business Process Outsourcing (BPO). As the latest Federal Government reforms expand the financial reporting requirements of all Australian businesses, you can have a dedicated virtual Bookkeeper – ready to chat with you anytime you want and as often as you need – to keep your business on track with the ATO’s reporting protocols.

Single Touch Payroll (STP) – Phase 2: Compliance

‘STP Phase 2’ is an anticipated expansion of the current STP system, initially announced in the 2019-20 Federal Budget. Phase 2 is all about centralising and requiring more detailed information from employers via STP.

In one way, Phase 2 will reduce the reporting burden on those employers who currently need to provide information to multiple government agencies because Phase 2 will require employees’ payments information to be provided only via STP.

It will no longer be adequate to report remuneration totals

The major adjustment for businesses will be ‘Disaggregation of Gross’. Currently, businesses report a gross amount of remuneration paid to employees, essentially a total of many different payment categories, which will be required in Phase 2 to be split into separate category components.

This gross salary/wage figure will require a business, in the first instance of data entry, to accurately classify all payments made to an employee. Where previously, one figure reported was satisfactory, the ATO will require – under Phase 2 – a breakdown of all specific payment types. This comprehensive breakdown is expected to ensure that those payment types that affect social security are treated properly.

Payment types to be separately reported are Gross, Paid Leave, Allowances, Overtime, Bonuses and Commissions, Directors’ Fees, Lump Sum W, and Salary Sacrifice.

When does Phase 2 start?

You will need to transition from Phase 1 to Phase 2 by the mandatory start date, 1 January 2022.

Your Digital Services Provider (DSP) will need to ensure your software is Phase 2-enabled.

For more information, see STP Phase 2 employer reporting guidelines

Your Future, Your Super: Compliance

In the 2020-21 Federal Budget, the Federal Government announced superannuation reforms under the program, ‘Your Future, Your Super’. This new 4-element reform will include another system check to be undertaken by employers.

From 1 November 2021, if a new employee does not stipulate a superannuation account for the deposit of compulsory employer contributions, then an employer must check with the ATO whether an existing superannuation account exists for the new employee. Such an existing account is known as a ‘stapled super fund’ and is to be used by an employer to deposit the superannuation guarantee where no other superannuation fund is named by a new employee.

How can YML help you to meet your STP Phase 2 and ATO reporting obligations?

YML’s Bookkeeping Service is a leading virtual process manager of all aspects of bookkeeping. A high qualified, specially trained, Australian-focused bookkeeper is available to partner with you and your business to streamline all reporting via STP, especially the new Phase 2. Our staff will manage your bookkeeping and stay connected with you via video chat or via phone as often as you choose.

Let YML take the burden of complying with the ATO’s reporting protocols of you. We will ensure that your STP reporting is completed accurately and in full compliance with your ATO obligations. This Phase 2 is all about accuracy, classification and timely reporting. With YML Bookkeeping Service, you will save time spent stressing over the day-to-day financials and gain peace of mind as ‘STP Phase 2’ advances to a more expansive bookkeeping exercise.

 How can YML help?

Talk to our YML Business Services Team today to see how YML Group can assist you with STP and Bookkeeping. For more information, view our website and contact us on (02) 8383 4455 or by using our Contact Us page on our website.