On 1st January 2022, changes were introduced to Single Touch Payroll (STP). The changes mean that employers are now required to report to additional information on or before each payday. This is known as STP Phase 2.
The additional information is designed to assist Service Australia customers, that might be your employees, get the correct payment. It will also reduce the need for employers to provide information about your employees to a number of different government agencies.
It is important to be aware that some Digital Service Providers (DSPs) needed more time to update their products and transition their customers to the next phase of STP. If your DSP has a deferral, this means that you will be covered under the providers.
- Your Payroll Product Is Ready – it’s time for you to start STP Phase 2 reporting now or have a plan in place to transition as soon as possible.
- You Are Covered By Your DSPs Deferral – make sure you understand when your product will be ready and that you are ready to start Phase 2 reporting when it has been updated, or no later than the first pay day after your DSP deferral expires.
- The Product You Are Using Is Not Being Updated To Offer STP Phase 2 Reporting – your DSP will let you know if they have another product you can use. If not, you’ll need to choose a product that offers STP Phase 2 reporting.
You need to start reporting the additional information when your product is ready. This means that it is essential for you to begin preparation as early as you possibly can.
Many DSPs are releasing changes progressively. Your DSP will provide you with instructions and it’s important that you follow them.
As an employer, it is super important that you are across the changes required, and you’re getting ready to start Phase 2 reporting. This includes;
- checking if you need to make changes to payroll pay codes/categories so they align with Phase 2 requirements
- reviewing allowances, you pay and how they need to be reported in Phase 2
- understanding changes to salary sacrifice reporting
- understanding how to assign an income type to each payment.
Amounts paid to closely held payees should now be reported through STP. There are concessional reporting options for closely held payees reporting which include:
- reporting actual payments on or before the date of payment (along with your arm’s length employees)
- reporting actual payments quarterly
- reporting a reasonable estimate quarterly.
Floods And Omicron Have Slowed Down Payroll Jobs Growth
Recently published figures from The Australian Bureau of Statistics (ABS) have shown that the number of payroll jobs across Australia have declined by 0.6 percent in the month to Saturday 12th March. These figures which highlight weaker levels of growth in payroll jobs due to various factors such as recent flooding and the second wave of the omicron covid variant.
Payroll jobs, are not seasonally adjusted, are predominantly employee jobs paid through payrolls.
Bjorn Jarvis, head of Labour Statistics for the ABS, outlined that there were differences across fortnights in payroll job figures.
“There were differences across the fortnights, with payroll jobs falling by 0.8 percent in the second half of February and then rising slightly, by 0.2%, in the first half of March,” says Bjorn Jarvis, head of Labour Statistics for the ABS
According to Mr. Jarvis, the changes coincided with the adverse weather conditions and flooding in New South Wales and Queensland in later February.
These changes also came amid the Covid-19 Omicron variant and lifting of pandemic restrictions in the country.
Accommodation and food services have been impacted the most because of Omicron.
“Given the disruption to business operations from the weather and Omicron infections, the increase in payroll jobs in early 2022 continued to be weaker than in both 2020 and 2021, particularly over the last month,” says Mr. Jarvis.
The team at Vault are here to help. We offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT ((07) 3012 6724).