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Single Touch Payroll (STP) Phase 2: Reminder of upcoming deadline

Single Touch Payroll (STP) Phase 2: Reminder of upcoming deadline

Posted 20 Mar '23
A new phase of Single Touch Payroll (STP) is being implemented in businesses across Australia.
In STP Phase 2 we see more information being requested from the Australian Tax Office (ATO).
Employers will need to provide the ATO with more details on their employee’s payroll using payroll software.
The goal is to reduce employers’ reporting requirements to multiple government bodies by integrating STP reporting.

Some of the improvements and main changes in this
next level of reporting are:

  • Itemised Earnings by types with a focus on:
    • Income types (e.g. Directors Fees, Bonus & Commissions, Overtime)
    • Salary Sacrifice
    • Allowance types
    • Leave categories.
    • Lump Sum Payments;
  • Termination payments with reason and details.

For those of you using Xero Accounting Software,
now is the time to get yourself ready.

Xero and their subscribers have a deferral for STP Phase 2 until 31 March 2023, this is instead of the ATO’s deadline of 1 January 2022. (Please note other software providers have different deferral dates). To stay compliant, we recommend you review your employment agreements carefully and take your time to accurately complete the following:

  1. Update existing employee records to capture STP Phase 2 items such as employee type under employment tab (FT, PT, labour hire, holiday worker etc.).
    (In Xero, your employee page has been updated to have an action button for employees that need review)
  2. Update pay items of each employee and map to STP Phase 2 earnings types.
    (A new tool has been added to Xero to review your pay items and replace them if they are not compliant for STP2, this can be accessed from the STP page in Xero.)
  3. Update leave categories and map to STP Phase 2 subcategories.
  4. Once ready, you can opt. into STP Phase 2.
If at any stage through this process you are unsure how to proceed, please contact your trusted Ashfords Advisor who will be able to assist you in navigating STP Phase 2.


Once activated, you can process your pay runs and lodge via STP as per normal and the additional information will be reported to the ATO at the time of each payment.
For more information, please visit these helpful links below: 
ATO STP Phase 2
Information
 ATO STP Phase 2 Information 		STP Phase 2
Resources STP Phase 2 Resources
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What’s this new tax:

On 20 March 2024, the Victorian State Government introduced the Commercial and Industrial Property Tax Reform Bill 2024 (legislation.vic.gov.au). The Bill is expected to become law and to take effect from 1 July 2024.

The Victorian Government, as announced in the 2023-24 Budget,  is progressively abolishing stamp duty on commercial and industrial property and replacing it with an annual tax.

The annual tax, to be known as the Commercial and Industrial Property Tax (CIPT), will be set at 1% of the property’s unimproved land value.

The tax will replace land transfer duty (stamp duty) that is currently payable on the improved value of the land when you purchase or acquire a commercial or industrial property in Victoria.

The new tax system will start to apply to commercial and industrial property if the property is transacted on or after 1 July 2024.

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