Now’s the time to review your payroll settings to meet new reporting obligations.
The deadline is fast approaching for transitioning to STP Phase 2 in Xero on 31 March 2023.
Single Touch Payroll expands on the current STP reporting to now include more information about the types of payments made to employees.
A few of the main areas that new reporting will now capture include:
- Tax File Number Declarations – these will no longer need to be sent to the ATO as this information will be included in your STP filing each time. You will still need to retain the declaration with your employee's HR records.
- Termination reasons - such as voluntary or forced redundancy.
- Employment basis - this is now a mandatory field for reporting.
- Disaggregation of Gross - currently STP reporting includes only a total for the gross amount for all payment types. This will now be broken down into more detail such as ordinary earnings, paid and unpaid leave, allowances, overtime, bonuses and commissions, directors' fees, lump sum amounts and salary sacrifice.
STP Phase 2 will not change the way you currently submit to the ATO. The way you lodge, the due date and end of year finalisation requirements will all stay the same.
Xero have some great education resources available to help with this transition process.
There are 4 steps in this transition:
- Update employee records
- Review and update pay item mapping to the new reporting codes
- Map leave types to the new ATO categories
- Switch to Phase 2 reporting when available
Please get in touch if you have any questions or require assistance with the transition steps.