What's New in STP Phase 2

(from the ATO's Business Implementation Guide)

The key changes between the Pay Event 2018 (Phase 1) and Pay Event 2020 (Phase 2) are:

• Income Stream – all remuneration must be reported by Income Type/Country Codes and the remuneration must be “disaggregated” into separately itemised components. For users this means you need to set an Income Type for all Payees. The most common would be 'Salary and Wages' or the old INB type.  Income Type is set on the Payee Details screen.

• Country Codes – some Income Types must now be reported by the Country Code for the foreign country related to the reported income
  
  
• Disaggregation of Gross – remuneration is now to be reported as separately itemised components (Payment Types) that have a common definition, rather than a specific definition per Income Type. For users this means you must report things like Overtime, Bonuses, Leave etc, and then any income not required to be separately identified is reported as Gross Amount.
  
  
• Tax File Number Declaration Forms – the current employment and withholding data for the payee must now be included in every pay event and will mean a payer has met their obligation to send Tax File Number Declaration details to the ATO. For users this means that you need to show what Tax Treatment applies to each Payee - this is set on the Payee Details screen.
  
  
• Employment Separation Certificates – reporting the type of cessation reason that ended the employment or engagement relationship between the payee and the payer will be used to minimise the need for payers to provide separate payee employment separation certificates to Services Australia. For users this means whenever a termination date is reported, a Cessation Code must also be reported - this is set on the Payee Details screen
  
  
• Tax Treatment Codes – a new mandatory field must now be included in every pay event that will indicate the PAYGW tax scales and other components that have been applied by the payer to determine payee withholding amounts. For users this means that you need to show what Tax Treatment applies to each Payee - this is set on the Payee Details screen
  
  

• Child Support Garnishees and Child Support Deductions – the option to include the Child Support Garnishees and Child Support Deductions that the payer has been instructed to deduct from the payee by the Child Support Registrar will replace the need for the payers to provide separate remittance advice directly to the Child Support Registrar
  
  
• Lump Sum E Letters – each financial year relevant to the lump sum E amount paid must now be included in the pay event prior to finalisation of the payee Income Statement, thus eliminating the need for the payer to provide lump sum E letters to payees. For users this means any Lump Sum E amounts should be recorded using a unique payroll category for each prior financial year period.
  
  
• Run Date/Time Stamp - for a Pay Event, the Date and Time the payroll was processed by the Payer must be reported. For MYOB users this will be extracted from the MYOB data file.
  
  
• Allowances - Many allowances were previously included and reported as Employee Gross Pay. Now, all allowances are to be separately itemised. This includes wage-related and disability allowances such as height, dirt, higher duties, first aid allowance. There are a number of new Allowance Types.
  
  
  

STP Creator

Phase 2 has required a major re-write of STP Creator. While the concepts and process remains the same, STP Field names have changed. In Phase 1, STP Creator used the STP Field names as adopted by the Single Touch Payroll API - see Phase 1 Field list.

With Phase 2, as most users now use SBR, the STP Field names have been brought in line with the ATO terminology, such as Gross Amount and PAYG Amount rather than Employee gross pay and Employee tax - see Phase 2 Field list.