As businesses continue to operate in today’s digital world, technology has transformed the way they function. The introduction of Single Touch Payroll (STP) by the Australian government is one of the most significant changes that have occurred in recent years. STP streamlines the reporting process for employers, ensuring that they report employee payments and superannuation to the Australian Taxation Office (ATO) in real-time.

We thought it was time we wrote a post that will help employers understand single touch payroll (STP) a little better.

STP phase 1 was introduced on 1 July 2018 for businesses with 20 or more employees. However, from 1 July 2021, STP Phase 2 (STP2) has been introduced for all businesses, regardless of size. So, what exactly is STP2, and why is it necessary?

STP2 builds on the existing framework of STP phase 1 and aims to provide the ATO with more comprehensive details about each employee’s pay and super contributions. Employers are now required to report the actual amounts paid to employees for each pay period under STP2. This means that employers need to provide more granular information about the various components of an employee’s pay, including allowances, deductions, and other amounts.

STP2 also mandates employers to report super contribution information at a more granular level. Employers must now provide the ATO with comprehensive details about the super guarantee (SG) contributions paid to each employee, including the base amount and any other amounts paid in respect of that employee.

The introduction of STP2 is essential as it helps the ATO to monitor employer compliance with their obligations to pay employees their entitlements. This includes ensuring that employees receive the correct amount of super, and their pay is reported accurately and in a timely manner.

Additionally, STP2 brings benefits to employers. By providing more detailed information about employee payments, employers can quickly identify any errors or discrepancies. This, in turn, allows employers to resolve any issues before they become significant problems that could result in fines or penalties.

We think this is all pretty important, and that STP2 is a crucial initiative helping the ATO to improve compliance and monitor employer obligations more effectively. While the reporting requirements may seem daunting at first, the benefits of more detailed reporting far outweigh the costs.

At Raven Accounting Services, we can help you navigate the STP2 reporting requirements and ensure that your business complies with the new regulations. Just ask us how we can help your business and ensure you stay compliant.