Single Contact Payroll (STP) Section 2 will see Australian companies construct on their current STP reporting to share extra info with the ATO and different authorities companies every time you course of a pay run. The primary stage arrived inside Xero in late August. Now, it’s time to prepare, as a result of stage two of the transition is rolling out in Xero Payroll over the approaching days.
What does this imply for you? For a fast refresher, STP Section 2 is being rolled out throughout three levels inside Xero. Because of this each employer reporting by means of STP in Xero might want to proceed by means of the three stage transition course of to make sure your payroll knowledge meets STP Section 2 compliance.
|Xero’s STP Section 2 reporting deferral has been prolonged by means of to 31 March 2023, which means Xero Payroll clients could have till the New 12 months to activate STP Section 2. Nevertheless, you will get your knowledge prepared immediately. Actually, it is suggested that you just full every stage sequentially as they’re made out there in Xero Payroll.|
We’re now arriving at stage two inside Xero’s STP Section 2 transition timeline
Stage one – Delivered in August: The primary a part of this course of is transitioning your current worker profiles to be STP Section 2 compliant. This implies offering new particulars on current workers, like whether or not they’re an worker or contractor.
Stage two – Rolling out late September: You’ll have to determine and replace sure pay gadgets with the brand new earnings classes outlined by the ATO for STP Section 2 reporting. Learn extra about this stage beneath.
Stage three – Coming quickly: That is the ultimate step within the STP Section 2 transition and can break paid go away down into further subcategories. We’ll assist you with a guided expertise in payroll to extra simply replace current paid go away sorts to satisfy the brand new reporting necessities.
Stage two entails the introduction of latest earnings classes
STP Section 2 introduces a set of latest ATO earnings classes to be used in your pay gadgets. It’s because gross quantities for every earnings sort will now must be reported as a separate, itemised quantity. What is going to this seem like in motion underneath stage two of the transition inside Xero? You’ll now have to itemise and report on the next particular person earnings parts:
When most of these funds are accurately itemised in your STPl submitting, the information will be shared throughout authorities departments (like Companies Australia). You’ll be able to study extra in regards to the technique of updating your earnings classes in Xero Payroll right here:
It’s necessary to notice that quantities you pay to staff by means of STP that will not be individually itemised shall be reported as gross or odd time earnings (OTE). Solely pre-sacrifice quantities which might be categorized as OTE ought to be included as gross. Study extra about gross reporting.
We’ll be launching the pay merchandise transition software that will help you with stage two
Xero has constructed a transition software to help you with seamlessly changing your current pay gadgets with new pay gadgets to satisfy STP Section 2 reporting necessities. We’ve additionally been rolling-out modifications to Xero Payroll in preparation for STP Section 2 for a while. Because of this, it’s doubtless that a few of your earnings pay gadgets could have already got the right reporting class assigned.
For instance, Bonuses or Fee funds have the earnings class Bonus and Fee. On this occasion, these pay gadgets don’t must be changed as they’ll robotically report accurately to the ATO by means of STP Section 2.
|You’ll need to replace every of your energetic worker profiles and mark that step as full within the STP Section 2 portal. The pay merchandise transition software will solely be made out there as soon as Step 1 has been marked as full.|
Methods to disaggregate all function allowances for STP Section 2
Many fashionable awards embrace allowances which might be added to an worker’s hourly fee and are paid for all functions of the award (reminiscent of when calculating funds for penalty charges, additional time and go away). Paying all function allowances to staff is predicated on the precise necessities of the trendy award that every worker falls underneath.
For those who require details about the allowances which may be relevant in your staff underneath a selected fashionable award, go to the Truthful Work Ombudsman’s web site or search impartial authorized recommendation.
With STP Section 2, you have to individually report all function allowances in opposition to the related allowance sort in Xero Payroll. You’ll be able to study extra about learn how to disaggregate all function allowances in Xero Central.
You can be notified inside Xero Payroll when every stage is offered
The transition to STP Section 2 reporting shall be gradual, and we encourage all clients to motion the steps as quickly as they turn out to be out there inside Xero Payroll. This shall be made clear to you inside your account, full with steerage on what must be achieved (as would be the case for the levels to comply with).
Begin planning in your transition now
Whilst you’ll have the time to make all related modifications, one of the best strategy is to get began as quickly as attainable. This may require some planning to make sure you have all the knowledge wanted. For those who’re uncertain about updating your payroll knowledge for STP Section 2, communicate to your advisor.
Xero’s instructional sources and transition instruments will enable you to by means of the method
- Register for our upcoming STP Section 2 webinar
- Watch the pay merchandise transition video
- Obtain the pay merchandise transition truth sheet
In search of extra info on STP Section 2? Try our Useful resource Hub, information to STP Section 2, timeline infographic and this useful guidelines. You may also go to Xero Central or seek advice from the ATO’s employer reporting tips.