STP Phase 2 is the latest version of Single Touch Payroll reporting introduced by the ATO.
Easy Business App is fully compliant with STP Phase 2.
FY2023 is "the Financial Year ending 2023", so the financial year from 1 July 2022 to 30 June 2023. Any payslip with a PAYMENT date in that period is considered an FY2023 payslip.
FY2024 is "the Financial Year ending 2024", so the financial year from 1 July 2023 to 30 June 2024. Any payslip with a PAYMENT date in that period is considered an FY2024 payslip.
We will update this article (and add more) in the coming days with more information about what is changing for STP Phase 2. As of today, you don't need to do anything different - you are automatically covered by our ATO deferral. Just continue your STP reporting in Easy Payslip as normal.
You can learn more about this in our blog article: STP Phase 2 - Important Information for Easy Payslip Customers.
When does STP Phase 2 reporting begin?
STP Phase 2 reporting will begin for all Easy Business App users from 1st July 2023 — so all payslips created for FY2024 will be lodged via STP Phase 2.
This means you can close FY2023 using STP Phase 1 reporting, and start reporting using STP Phase 2 for FY2024. We felt that introducing mid-year would have added an unnecessary complication, and extra work, so we worked with the ATO to secure a deferral to allow us to do that. This has saved a lot of complexity for our users.
What is STP Phase 2? Do I need to do things differently now?
STP Phase 2 is an update to the existing STP reporting you are already doing, there have just been some changes with what information needs to be captured and how that information is sent to the ATO. Broadly, this means you will see a couple of extra fields in your Employees screens and some new payslip item types on the Process Payroll screen. You will create your payslips and lodge STP through Easy Business App in just the same way as before.
What's changing in more detail?
There are some small changes to Employee records, Process Payroll payslip item types and the Final Payslip process for when an employee leaves.
- Employee changes
- Your employees who are tax resident in Australia will now have an additional checkbox on the 'Taxes' screen to indicate whether they are a Closely Held Payee. Learn more about Closely Held Payees.
- For any employees on the Working Holiday Maker scheme, you will now have to select their Home Country from a drop-down.
- For any employees with Rostered Days Off (RDO)/Time Off in Lieu (TOIL) awards, you can now choose whether the employee's award requires Super to be paid on this time (use "Regular Hours") or not (use "Overtime").
- Payslip Items
- The way Allowances are sent in STP files has changed, and you'll see some new ones, for example Tools, Qualifications and Award Transport. Any existing allowances on payslips will need to be re-entered on the first payslip of the new financial year.
- A new Deduction type for Reimbursements (when you need to reimburse an employee for a business expense they paid out of their own pocket)
- New Leave types and paid-out leave, including Workers Comp, Ancillary/Defence and Parental.
- Some additional Salary Sacrifice options. Learn more about salary sacrificed benefits.
- Final Payslip
- An employment end date and a reason for the employment ending must be captured whenever employment ceases
- There are some additional options for redundancy payments and cashed out leave.
What do I need to do?
When you create your first payrun for FY2024 (i.e. your first payrun with a payment date on or after 1 July 2023) you will see a pop-up window where you will be asked to confirm for each employee:
- Whether they are a 'Closely Held Payee' (only for Australian tax residents). Learn more about Closely Held Payees.
- What their 'Home Country' is (only for employees on the Working Holiday Maker scheme).
This is a one-time activity, and this is the only thing you need to do to become ready to report via STP Phase 2 in Easy Business App. It should take you less than 60 seconds. You can also trigger this process by clicking the banner at the top of the Employees screen.
What if I need to make a change to FY2023 after I've started reporting for FY2024?
If you subsequently need to make a change to an FY2023 payslip (for example, to complete your final payslips or to correct a mistake ), you can do that as normal and lodge STP (including re-lodging Final STP). Easy Business App will automatically send STP Phase 1 lodgements for FY2023 and prior, and send STP Phase 2 lodgements for FY2024. There's some clever stuff going on behind the scenes, but you don't need to worry about that. Just do what you'd normally do and the system takes care of the rest.
How does this affect my FY2023 Final STP?
In short, just do what you normally do! Your finalisation for FY2023 will be sent as an STP Phase 1 lodgement (which you must complete on or before 14 July). It doesn't matter if you have already created payslips for FY2024 when you do your FY2023 finalisation, the system will automatically handle the lodgement correctly.