In December 2020, the ATO announced that it is working towards introducing 1st July 2021 as the start date for STP phase 2. Under these new rules, employers will be required to report additional payroll information on each pay day.
Some of the major changes which set to be introduced include; moving away from the payment summary categorisation of income to reporting by income type, including gross, allowances (tuple), paid leave (tuple), director fees, overtime, bonuses, salary sacrifice (tuple), and commissions.
A petition which expresses concerns about 1st July 2021 being the start date for STP phase 2 has gained traction. The petition encourages the ATO to delay the start date of the second phase of Single Touch Payroll, with a payroll association arguing that the ATO’s six-month deadline as “highly negligent”.
Jason Low the head of The Association for Payroll Specialists (TAPS) believes that although the benefits of STP phase 2 are widely supported, it is clear that meeting the 1st July 2021 deadline is going to be virtually impossible for a lot of Australian businesses who are still trying to overcome the impact of covid-19.
Mr. Low elaborates that “While a positive act, its severe deadline is highly negligent of the work needed to carry out a smooth transition, and is bound to cause a series of disasters to the payroll industry and Australian economy as a whole,” says Mr. Low
Adapting to phase 2 of Single Touch Pay Roll is no small task. Software developers will need to rely on the finalised specs, which ATO has yet to release, to write, trial and finalise the software functionality to reflect the new components before rolling it out to customers. Only once that’s done can we commence educating employers on the new software and its impact on the way they manage payroll.
Jason Low believes that “the proposed deadline of July 1st 2021 means people are forced to spend the next six months rushing to get work done that would have otherwise taken 12 to 18 months to complete”.
According to Mr. Low “the consequence of this is very clear — there will be a massive risk of non-compliance, incorrect payroll data entered, as well as negative public reactions from employers, industry bodies and registered agents.”
The Payroll Associates have launched an online petition and they hope that it will be enough to sway the ATO to delay the implementation of phase 2 of Single Touch Pay Roll on 1st July 2021 and shift it to a later date.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
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