How to Enable Single Touch Payroll Phase 2 (STP Phase 2)

1

Upgrade to the latest v55 patch

To prepare for STP2, you will need to be running TASS Version 55.4.x.

To enable STP2, a v55 patch release will be available on Tuesday 15th March (required for Step 12 onwards). This version will be: 55.4.130.

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2

Ensure all employees have a Tax File Number

Check and enter employee 'Tax File Number' on the 'Tax & Bank' tab.

To review records in bulk: 

1. Payroll HRM > Payroll > Employee Information > Employees: 'Print' 

2. Select TFN Status' in 'Employee Additional Fields' to see which employees do and don't have a TFN.

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3

Update Tax & Bank tab

Update the new fields in Tax & Bank tab in Payroll HRM > Payroll > Employee Information > Employees OR Employee Grid Entry. The new fields include:

• Study Training & Support Loan Debt.

• Country of Origin: you must report a Country of Origin when you make payments to employees who is a Working Holiday Maker.

• Medicare Levy Exemption.

• Medicare Levy Reduction.

• Medicare Levy Surcharge.

When using the grid, the 'Country of Origin' field can only be updated for employees who have the 'Residency Tax Status' of Working Holiday Maker.

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4

Annual Tax Offset Amount

Your employee may have given you a Withholding Declaration which claims an offset amount to reduce the amount you withhold from their pay.

This will automatically be calculated based on the sum of Rebate and Zone Rebate entered under Payroll HRM > Payroll > Employee Information > Employees in 'Tax & Bank' tab.

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5

Report Paid Leave

Under STP Phase 2, Paid Leave must be separated from the Gross amount and reported under the categories below:

• Paid Parental Leave.

• Workers' Compensation.

• Cash Out of Leave in Service.

• Unused Leave on Termination.

• Ancillary and Defence Leave.

• Other Paid Leave

To meet this reporting requirement you will need to review all your paycodes that relate to paid leave and set the Payment Type field to 'Paid Leave' and choose the appropriate value for the Leave Type field.

You can update your paycodes in Payroll HRM > Payroll > Setup Information > Payroll Setup in 'Paycodes' tab.

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6

Report Child Support Deductions

Child Support Deductions and Garnishees can now be reported through STP.

If you wish to report Child Support Deductions and Garnishees through STP you will have to review the paycodes for these deductions and ensure the Payment Type field is set to 'Allowances and Deductions' and choose the appropriate value for the Deduction Type field. The options for the Deduction Type field will be:

• Child Support Deductions.

• Child Support Garnishees.

Child Support Deductions and Garnishees must be reported separately so you will need a paycode for each type of deduction that you use.

You can update your paycodes in Payroll HRM > Payroll > Setup Information > Payroll Setup in 'Paycodes' tab.

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7

Report Salary Sacrifice

Under STP Phase 2, Salary Sacrifices must be reported separately from the Gross amount.

When reporting salary sacrificed amounts, there are two types to report:

• Superannuation (salary sacrifice type S) – for superannuation to a complying fund or retirement savings account (RSA).

• Other Employee Benefits (salary sacrifice type O) – for benefits other than super.

1. Payroll HRM > Payroll > Setup Information >Payroll Setup: 'Paycodes' tab: locate your Salary Sacrifice paycodes. 

2. Set Payment Type to Salary Sacrifice.

3. Choose the appropriate value for the Salary Sacrifice Type field.

On the Paycodes tab, use the Ctrl + F to search for descriptions.

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8

Report Overtime

Under STP Phase 2, Overtime must be reported separately from the Gross amount.

1. Payroll HRM > Payroll > Setup Information >Payroll Setup: 'Paycodes' tab: locate your Overtime paycodes OR add new paycodes. 

2. Set Payment Type to 'Overtime' for existing or new Overtime paycode.

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9

Report Bonuses and Commissions

You may pay some employees Bonus and Commission payments to reward their performance, service or for meeting a specific goal. These will need to be reported in STP Phase 2 reporting.

1. Payroll HRM > Payroll > Setup Information >Payroll Setup: 'Paycodes' tab: locate your Bonuses and Commissions paycodes OR add new paycodes. 

2. Set Payment Type field to 'Bonuses and Commission' for existing or new Bonuses and Commission paycodes.

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10

Report Directors' Fees

If you pay Directors' Fees you must separately report these in your STP Phase 2 report.

1. Payroll HRM > Payroll > Setup Information > Payroll Setup: 'Paycodes' tab: locate your Directors' Fees paycodes OR add new paycodes. 

2. Set Payment Type to Directors' Fees for existing or new Directors' Fees paycode.

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11

Update Lump Sum Payments

The ATO has made some changes to the reporting of Lump Sum Payments for STP Phase 2.

• Lump Sum E payments: must now be reported per financial year.

• Return to Work payments: must now be reported as Lump Sum W.

Lump Sum E Payments

1. Add / Update Lump Sum E paycode in Payroll HRM > Payroll > Setup Information > Payroll Setup in 'Paycodes' tab.

2. Set 'Payment Type' to 'Lump Sum Payments'.

3. Set 'Lump Sum Payment' to 'Lump Sum E'.

4. Nominate the Income Year the Lump Sum Payment occurred in (this will only appear once you've selected Lump Sum E)

Return to Work Payments

1. Add / Update Return to Work paycode in Payroll HRM > Payroll > Setup Information > Payroll Setup in 'Paycodes' tab.

2. Set 'Payment Type' to 'Lump Sum Payments'.

3. Set 'Lump Sum Payment' to 'Lump Sum W'. 

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12

Enable STP Phase 2

1. Payroll HRM > Payroll > Setup Information >Payroll Setup: 'PAYG Setups' tab.

2. Click the 'Edit PAYG' link and tick 'Enable STP Phase 2' checkbox.

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13

Update Allowances

Allowances will continue to be reported separately under STP Phase 2. However, the ATO has identified three new Allowance Types:

• Qualification and Certification Allowances.

• Task Allowances.

• Tool Allowances.

Allowance types you will separately report in STP Phase 2 are:

You can update your paycodes in Payroll HRM > Payroll > Setup Information >Payroll Setup in 'Paycodes' tab.

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14

Run the Employee Data Exceptions Report

1. Payroll HRM > Payroll > Employee Information > Employees: ensure the checkboxes for 'Include Current Employees' and 'Include Terminated Employees' are selected and click 'Go'.

2. On the Payroll Employees List screen, click the 'Check Employee Data' button to generate the report.

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15

Run the Payroll Setups Exceptions Report

1. Payroll HRM > Payroll > Setup Information >Payroll Setup: 'PAYG Setups' tab

2. Click the 'Check Payroll Setups' button.

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16

Commence STP Reporting

You are now ready to start STP Phase 2 reporting. 

All remuneration you pay to employees that is reportable through STP, and is not separately itemised, should be reported as Gross.

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