Single Touch Payroll - Phase Two commencing from 1 January 2022

Following the successful roll-out of Single Touch Payroll reporting in 2019, the Australian Tax Office has introduced an expansion of the program (as outlined in the 2019-20 Federal Budget), with ‘Phase Two’ due to commence from 1 January 2022.

The extension aims to make it easier for employers to report information about their employees to multiple Government agencies, assist Services Australia employees to receive the right payments at the appropriate time, and provide a more streamlined channel for interaction with the ATO.

Under 'Phase Two', your current STP Reporting won’t change, with the way you lodge, the due date and the End of Year Finalisation remaining the same. However, businesses will be required to make sure your payroll information meets the new requirements and ensure updated information is captured, including:

  • Amount paid to staff - instead of reporting a single gross amount, you'll separately show items such as overtime, paid leave, bonuses and commissions;
  • Income types - you'll include information such as whether a payment is regular salary and wages or income for working-holiday makers;
  • Employment conditions - you'll provide additional information such as whether is full-time, part-time, or casual, and if they leave, the reason they stopped working with you; and
  • Employees' TFN declarations - you'll no longer need to send declarations to the ATO. The employee will provide it to you and you'll need to keep it with your employee records.

What Happens Next?

It is important to highlight that if your payroll software provider (MYOB, Xero, Reckon, etc) is ready is ready for 1 January 2022, employers should start Phase Two reporting from this date. However, please be aware many payroll software providers have secured a deferral until the following year (1 January 2023) providing customers an extended period to update their required payroll information.

Your payroll software provider will update their platform at this time to offer Phase Two reporting and will notify you accordingly.

Should you wish to commence reporting from January 2022, you should check with your bookkeeper or payroll administrator before the New Year to confirm your business is ready to report from the period. Alternatively, likewise can be done ahead of the deferred timeframe.

For More Information

Our team is here to assist SME clients with the STP Phase Two transition and the updating of appropriate details. To discuss the process in greater details or answer any questions you may have, please contact our adviser team on (07) 3002 2699 |

Makoto Terasaki

Written by Makoto Terasaki