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All you need to know about Single Touch Payroll Phase 2

    Written by Julie Cairns, an Ashfords Trusted Advisor


The ATO are corresponding with employers to ensure that they are STP Phase 2 ready. Ashfords have compiled the following key information to address your questions about the STP Phase 2 program.

What is STP Phase 2?

STP Phase 2 is an extension of the Australian Government STP initiative which originally started on 1 July 2018. It expands the program to capture more detailed payroll information.

When does STP Phase 2 start?

The mandatory start date for STP Phase 2 was 1 January 2022, however, the ATO have adopted a flexible approach to the transition. A number of Digital Service Providers (DSPs) including Xero and MYOB have secured deferrals to allow more time to upgrade their solutions to meet STP Phase 2 reporting requirements. Xero have secured a deferral until 31 December 2022.  Similarly, MYOB have a deferral until 1 January 2023.

What is changing with STP Phase 2?

Many employers will find that the additional information required is already captured by their current payroll software. The key changes include:

  • Gross income will be disaggregated to report the various components.
  • Reporting employment and taxation conditions for employees including TFN or ABN, commencement date, employment basis and tax treatment via a new 6-character code.
  • Reporting income types to identify amounts with specific tax, super or social security treatments.
  • Reporting country codes for Australian residents working overseas.
  • Option to report child support garnishees and deductions.
  • Option to provide previous Business Management Software IDs and Payroll IDs.

What are the benefits to employers of STP Phase 2?

STP Phase 2 will streamline employer interactions and ease the burden of reporting employee information to multiple government agencies. The key benefits include:

  • Removing the need to send TFN declarations to the ATO (although these should still be completed and held with employee records).
  • Notifying concessional reporting via income types (e.g. for closely held employees).
  • Removing the need to provide Lump Sum E letters for back payments to employees.
  • Notifying changes in software or employee payroll IDs to fix issues with duplicate income statements through myGov (only if this functionality is supported by your solution).

How can I get support with the STP Phase 2 rollout?

Contact your Ashfords Trusted Advisor as soon as possible to receive guidance regarding your transition to STP Phase 2 reporting.

Contact us today for more information.

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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 ( 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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