STP2 begins from 1 January 2022 unless a deferral is in place.  

What is STP2?

STP2 is an increased level of reporting each time a pay run is processed. STP1 was all about reporting gross wages, tax withheld and superannuation to the ATO. STP2 will incorporate more information so that other Government Departments can streamline their services. Separation Certificates will no longer need to be provided to employees on termination, child support deductions will be automatically reported and income and allowance will automatically be reported to Services Australia, meaning that employers will no longer need to verify employment status and income for employees.

What does it mean for employers?

Most software providers are already compliant with the new requirements and will be ready for the transition on 1 January 2022. Xero has a deferral in place to December 2022, which means that their clients have until then to begin reporting. Some software providers will transition their clients progressively to avoid system issues caused by too many users trying to lodge at the same time.

Your software payroll settings need to be accurate that the correct items are being reported. This may require a re-mapping of payroll codes.

The ATO will write to every employer informing them of STP2 requirements by the end of November 2021, and the ATO Website has guidelines for employers.

If you would like assistance to review your payroll settings or prepare for STP2, our bookkeeping team are only too happy to assist!