What do you need to do?
Nothing right now, your accounting software will do most of the work in the background – Xero is still building the features and has an extension to March 2023, so there is plenty of time to transition. We will complete the transition for our clients in the next few months (once all the kinks have been ironed out).
Sit Tight Please!
What does STP2 mean for your business?
This will not change how you pay your employees – awards etc are not changing.
The ATO wants you to report wages in a more granular way, gross wages will be broken down into the various components. You need to identify allowances, leave, commissions, directors fees (not working in the business), bonuses, loadings, overtime, RDOs & workers compensation payments – previously these payments were mixed in with gross wages.
You will be able to include details of any garnishees or child support deductions you withhold from employee wages, so you won’t have to report that information manually to Centrelink anymore.
Each payroll submission will include details of employment type and tax scale info, so you won’t need to submit TFN declarations when a new employee starts or when their details change. (you will still need to collect the info so you can setup your employees properly – just won’t need to submit to the ATO).
When your employee leaves either by quitting, being terminated, retiring etc – the reason will be reported to the ATO with their final pay. There will be no need to complete separation certificates for workers who leave.
We’ll be in contact when we are ready to start the rollout, until then STP means Sit Tight Please.
