As an Australian Business owner, you may be comfortable with your current ATO submissions.
Having worked with STP (Single Touch Payroll) there are currently in essence 3 items that are submitted to the ATO. These are: Wages, Super and PAYG and are submitted through your payroll program.
What is changing?
As of the 31 December 2022 the deferral in place for MYOB and Xero expires and all businesses will be required to report under STP Phase 2. (Single Touch Payroll Phase 2)
As a business owner it is essential that you understand:
- What this means;
- This impact this has on you, your staff and your business;
- How you can prepare accordingly.
Below I have outlined these questions so that you can ensure you are ready to be compliant (and relaxed) BEFORE the end of year rush!
What does STP Phase 2 mean?
STP phase 2 now requires that even more information is being gather from what you are submitting through your STP lodgement every pay run. Not only to the ATO but also to other government agencies such as Services Australia which includes Centrelink and Child Support Services.
How does this impact you as the business owner?
As a business owner you need to ensure that the wages, super and tax codes that you use in your payroll are coded correctly on the back end of your accounting program. This is to ensure that each pay run is reported correctly to the ATO and other relevant services for each employee. Do not assume that the accounting program will take care of everything for you – while they will be doing work to ensure the ‘standard’ pay items are correct, they will not take responsibility for any special or out of ordinary items you may have – it is on you to make sure you are reporting correctly.
How does this impact your staff and employees?
Employees will have a clear understanding on their wages. i.e., how they are being paid as well as the types of tax payments they are paying, and that all of these items are being reported to all relevant agencies for them.
All of their wage and tax information will be streamlined and the information will be available and accessible in their MyGov account.
How does STP Phase 2 impact your business?
Once STP Phase 2 has been set up in your payroll system, there will be less administration required as you will not need to submit various forms which prior to STP2 were required, such as Tax file declaration forms and Employment Separation Certificates.
The information in these forms will all be included in every pay lodgement and readily available online by the relevant authorities.
As a business owner you will not need to report separately to Child Support Services as it will be included on each payslip.
How can you as a business owner prepare for STP 2
Chat to your bookkeeper ASAP
Once your accounting program has the STP2 facilities available you will need to conduct an audit of all of your payroll items and all items will need to be assigned the correct STP2 code. This ensures that everything is recorded correctly and you remain fully compliant.
Although the change can feel overwhelming, it will allow your team to have a clear understanding of their wages and tax and will save you time (and thus money) on your annual submissions.
If you are wanting to work with a bookkeeper who is able to assist you with the STP Phase 2 payroll audit and update, I invite you to reach out to me so we can have a chat and see how I can help you.