Single touch payroll, set to expand!
The ATO has confirmed Single Touch Payroll (STP) reporting for micro-employers with 1 to 4 employees and small employers with closely held payees will commence from 1 July 2021.
A closely held payee is an individual who is directly related to the entity from which they receive payments, for example:
- Family members of a family business
- Directors or shareholders of a company
- Beneficiaries of a trust.
STP reporting for micro employers is not the only update, the expansion of STP continues with the introduction of STP Phase 2. In the 2020 Budget it was announced that the ATO would expand the data collected through STP. This expansion is mandatory from 1 January 2022.
Interestingly the ATO have recently indicated the role out is largely dependent on the software companies and this may not be a definitive cut-off. STP Phase 2 is designed to reduce the reporting burden for employers needing to report information about their employees to relevant government agencies and assist the administration of the social security system.
Additional information required to be reported in STP Phase 2 includes:
- Employment Conditions
- Income types and country codes
- Itemisation of allowances
- Salary Sacrificed amounts
- Categorisation of lump sum payments
A lot of this new reporting is reliant on software companies and payroll provides updating their software to accommodate these changes.
Our resident Xero Heroes will be keeping a close eye on STP expansion and the potential impacts it may have on our clients.
If you have any questions regarding STP, get in touch today!