Single Touch Payroll Phase 2

What is Single Touch Payroll (STP) Phase 2?

While most employers are familiar with Single Touch Payroll (STP) now that Phase 1 has been fully integrated; Phase 2 is the next step along the STP reporting journey. Where STP Phase 1 enabled the reporting of employees’ tax and super directly to the ATO, STP Phase 2 expands to capture more detailed information. This means that while your payroll will still be processed in the same manner, some key information in the background will have to be updated to meet the STP Phase 2 requirements.


The reason for the next phase is to align Centrelink with the Australian Taxation Office. Centrelink will receive information on not only your gross and super but allowances, bonuses, leave and termination payments. There will be no need for employment declaration forms, separation certificates, updating the Child Support information or reporting of income to Centrelink for benefits once it is all operational.

When will STP Phase 2 be implemented?

Although the official start date for STP Phase 2 reporting was 1 January 2022, Xero have a deferral in place for their customers to be covered until 31 December 2022. So, there’s no need to worry about the January deadline – we’re on top of it!

What do these changes mean?

Xero is rolling out STP Phase 2 transitions throughout this year, so we here at KBAS Bookkeeping will need to be working in the background of your file to ensure that you are STP Phase 2 ready when the deferral is ended. As this is quite a significant transition, it may take some time to ensure all employees have been moved over and set up with the new STP Phase 2; because of this, we will be in touch with each of our clients (after EOFY) to discuss the steps that need to be taken to make you STP Phase 2 ready!

For more information on Single Touch Payroll see the link to the Australian Taxation Office here

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