As part of the 2019–20 Budget, the Australian Government announced that Single Touch Payroll (STP) would be expanded to include additional information.

The expansion of STP, also known as STP Phase 2, will decrease the reporting burden for employers who need to report information about their employees to multiple government agencies. It will also help Services Australia’s customers, who may be your employees, get the correct payment at the right time.

The mandatory start date for Phase 2 reporting is 1 January 2022.

Here are a list of ways STP Phase 2 will benefit employers.

• You’ll no longer have to send us your employees’ tax file number (TFN) declarations. Your employees will provide it to you, and you’ll need to keep it with your employee records.
• If you’re using a concessional reporting option, such as for closely held payees or for inbound assignees, you’ll be able to tell us through reporting income types.
• If you make a Lump sum E lump sum Epayment, you won’t need to provide Lump sum E letters to your employees. You’ll have included the amount and the period it relates to.
• If you change software or your employee’s payroll ID, you can tell us in your STP report if your solution has this functionality. This will help fix issues with duplicate income statements for employees in ATO online services through myGov.

The ATO will also share payroll information that is reported in near real-time with Services Australia. They’ll use it to streamline requests:

• for you to provide or confirm employment and payroll information about your employees
• from your employees to provide employment and payroll information such as pay slips for prior periods.

You may no longer need to provide separation certificates when your employees leave. The date and reason an employee leaves will also be included in your STP report.

You can also voluntarily report child support deductions or garnishees (or both) through STP. This reduces the need to send separate remittance advices to the Child Support Registrar.

Here are a list of ways STP Phase 2 will benefit employees.

Some changes under Phase 2 will help us streamline interactions for employees, such as:

• We’ll make it easier for employees at tax time as we’ll have better visibility of the types of income they’ve received and where it should be pre-filled on their individual income tax return.
• Over time, the new information reported will allow us to tell employees if they’ve provided you with incorrect information that may lead to them getting a tax bill. For example, where an employee hasn’t notified you that they have a study and training support loan.

We’ll also share STP information with Services Australia so they can streamline interactions with their customers. Over time, they’ll use STP data to improve their services by:

• pre-filling details they already know – saving their customers time filling out claims and reports
• reducing how often they’ll need to contact customers – STP will give them some information that they currently need to confirm by phone or online
• streamlining claims – their customers won’t need to supply as many documents
• enhancing Family Tax Benefit processes – by sending SMS and email messages to their customers when
  • STP data shows their family income estimate may be too low
  • they have a new job
  • their employment has changed.
• helping them pay their customers the right amount
• using STP information to improve the customer experience if a customer has debt to pay. STP information allows Services Australia to understand their customers’ recent employment and income history – this helps them assist customers to repay any money owed.