Be prepared with a comprehensive set of Access MicrOpay (formerly Sage MicrOpay) resources to streamline your transition to the new STP Phase 2 reporting requirements.
Nola Andrews - Flinders Banner Pty Ltd
There’s nothing you need to do at this stage, nor should you be concerned as you are already using STP-enabled payroll software. You simply need to continue STP reporting as you are currently.
What happens next in your STP2 transition:
We are excited to engage with you via a series of events, webinars and training sessions designed to accelerate your MicrOpay STP2 compliance.
Wendy Cornish - Dicker Data
Save the date for the annual Payroll Compliance Virtual Event in 2022
We are busy building a jam-packed 2-day agenda for our annual payroll event, with expert guest speakers and content that will give you everything you need to know about STP2. Event will go on sale in February 2022, for now, please save the date in your calendar here.
Sessions to be added in early 2022
“What’s new in payroll” - Glynn Flaherty
Virtual lead EOY sessions
More Sessions to be added in early 2022
One of the key areas of change relates to the values that were previously reported in Gross.
If you have been following the latest ATO updates on the new reporting requirements for STP2 you will have started to learn terms such as Disaggregation of Gross, Tax Treatment, Income Types to name a few. A comprehensive overview can be found within The ATO Employer Guidelines.
IMPORTANT CHANGE: The values paid to an employee now are to be ‘dissected further’ into groupings that both Services Australia and the ATO need. Hence the new requirement to ‘Disaggregate’ the Gross value currently reported.
STP2 is heavily based on this new requirement to ‘Disaggregate the Gross' value you are currently reporting. The new changes follow similar reporting that can be displayed on an employee’s pay advice.
EXAMPLE: When paying an employee, it’s not just a gross value that is shown, the various components of pay that the employee is being paid need to be provided so that the employee is able to understand what they worked and are being compensated for.
We have included are a few examples in this Quick Start Guide to assist in understanding how to approach STP2 changes.
It is always good practice to review how your business constructs payments for employees. We recommend you specifically start to review Allowances.
To better understand the new changes that may affect how you need to report for STP2, we recommend you refer back to The ATO Employer Guidelines which provides great examples.
There are new categories and changes to definitions that have been introduced for STP2. You will start to notice that simple categorisation of allowances is no longer sufficient, as previously in STP1 most allowances were reported in Gross with only a few reported separately.
There are now 9 separate categories for allowances. A couple of new ones have been introduced which are Qualification and Certification allowance (allowance type QN) and Task Allowance (allowance type KN).
IMPORTANT CHANGE: Instead of categorising an allowance on ‘what’ is being paid, we need to consider 'why' it is being paid. This is important as the data that is sent for STP2 reporting is required by Services Australia to be analysed for a wide range of varying benefits that they calculate for many differing situations, and ‘why’ is now important – not because of its description or how it is taxed; hence there are new categories to consider.
EXAMPLE: If we use a First Aid allowance as an example
This is a very clearly explained example in the ATO’s Employer’s Guide – under Allowances.
DECISION: Using the example above – familiarise yourself with the Allowances section of the ATO’s Employers Guide and review your Allowances in your system and see if you can work out which categories they will fall into.
Where unsure; you may have to seek further clarification from your own employer contracts, potentially Fair Work Awards or an Employment lawyer.
Overtime is when your employee works extra time.
The ATO Employer Guidelines include good examples on some of the finer and more complex situations around when overtime may not actually be overtime.
IMPORTANT CHANGE: You may be surprised to learn that in some specific situations, the payment of Leave Loading would be classified as Overtime and not as Paid Leave.
Within the ATO Employers Guidelines they explain the difference and where your business has paid leave loading historically, it will be necessary to review to make sure that it is being reported according to the correct category.
Salary Sacrifice and how this is reported is changing with STP2.
IMPORTANT CHANGE: The values that previously reduced the Gross value reported to the ATO are now required to be reported separately.
In addition, to be clear on the type of salary sacrifice that is in place it is defined between 2 types of categories. Superannuation Salary Sacrifice – type (S) and all other Salary Sacrifice deductions – type (O).
DECISION: Review how you categorise salary sacrifice in your payroll solution, as all payments that relate to Superannuation are required to be identified when reported under the new STP2 requirements.
As part of the design of our solution, we have considered how best to manage some of these changes for you. A number of these will be included in future releases
Listed below are some of the areas that will be automated to assist in your transition to STP2.
Tax Treatment – this ATO term relates to the detail of how employees are being taxed in your payroll solution.
Tax Declaration – A tax declaration form is still a requirement to begin employment and must still be completed by the employee and submitted to the employer to know how to tax their pay.
Income Types – this ATO term relates to the type of employee and how the income is derived and taxed.
Based on the setup of every employee in your payroll solution, an Income type will be created and displayed and will need to be reviewed.
There are new types that your business could be utilising and will need to classify where these are relevant
The ATO Employer Guidelines explain all the changes that are needed for STP2 Reporting.
The Access Group will be providing a range of services and resources to assist in the transition to STP2 reporting in 2022.
No need to go it alone, our team of consultants are ready to take you though your own STP2 journey to ensure you transition efficiently.
Bookings open soon
Includes full STP2 Readiness package plus:
Bookings open soon
Includes full STP2 Readiness package plus EOY Package:
Bookings open soon
Includes full STP2 Readiness Plus package plus EOY Package plus:
Bookings open soon
To help you navigate through the STP2 changes, we’ve put together some resources.