How to set up for STP Stage 2 Rollout

Single Touch Payroll (STP) Phase 2

Hello everyone,

If you haven’t heard yet, Single Touch Payroll (STP) Phase 2 has officially rolled out.

STP Phase 2 is the latest evolution of the Single Touch Payroll (STP) system, which was introduced in Australia in 2018. This rollout includes a number of new features and updates that will improve the accuracy and efficiency of reporting payroll data to the ATO. This is a great opportunity for businesses to get up to date with their tax and super obligations.

To get started, you’ll need to register your business with the ATO and provide your STP information. Your payroll software provider can help you with this. Once your registration is complete, you’ll be able to report your payroll information to the ATO each pay period. To simplify the process, here are the steps broken down.

How to Set up STP Phase 2

Step 1: Update Employee Profiles

Updating Employee Profiles requires you to transition your existing employee profiles in order to be STP Phase 2 compliant. This stage mainly means you will need to provide additional details – ie. whether they’re an employee or contractor.

Step 2: Replacing Pay Items

As an effort to be transparent and accurate with the reporting, Step 2 requires you to break down, identify and update the pay items that make up the employee’s overall pay instead of reporting a single gross amount. The ATO has provided different reporting categories to help you assign to your earnings pay items, some examples include
Allowances, PAYG Withholding, Overtime etc.

Step 3: Leave Categories

In this step you need to classify, break down and organise your company’s paid leave into additional subcategories to meet the existing paid leave types according to ATO’s new reporting guidelines.

Step 4: Enrol in STP Phase 2

That’s it! As soon as you have completed your payroll data and marked each step as complete, you will be able to opt-in to Phase 2 reporting.

The ATO has also released a range of helpful resources to help businesses get ready for the STP Phase 2 rollout. These include how-to guides, webinars, and video tutorials. It’s important to familiarise yourself with these resources so you can make the most of the new system.

We hope this information has been helpful. If you have any questions or need assistance getting ready for STP Phase 2, please don’t hesitate to reach out.

Partner with Aero Group, and we’ll do our best to ensure you are compliant with ATO’s regulations.

Need help?

Feel free to contact us if you need any assistance with the management of your tax affairs.

How to set up for STP Stage 2 Rollout