STP 2 = Single Touch Payroll Phase 2

Before we dive into Single Touch Payroll Phase 2 it’s time for a bit of a history lesson.

Back to the Future. Marty and Doc
Okay, maybe I exaggerate…

Back in the 2019-2020 Budget the government announced that Single Touch Payroll (STP) would be expanded on to include additional information.

Including the extra info will reduce the reporting burden for employees – as you will not be required to report about employees to more than one government agency. And this info will support the administration of the social security system.

Now we had just gotten used to STP first brought in 2018.

We had all the conversations about “No, you don’t get PAYG Summaries anymore. It’s populates on your income statement. Here’s an info sheet for your workers”, “Yes, the ATO wants more information about wages”, “Yes, we still need to lodge Activity Statements”. “Yes, those STP Events/Payruns need to be lodged with the ATO on time”.

So the simplest explanation about STP 2 is this = The ATO wants more clarity about what exactly goes into Ordinary Hours, Allowances, Bonuses and Commissions, Overtime etc.

Disaggregation of Ordinary Hours

Yes, it’s more information. But the ATO has a system that has been tested against STP and now knows that it can handle the volume of all Australia’s payroll info. Also see above about

It has a few convenient factors:

STP 2 Xero Graphic

1. TFN Declarations will be incorporated in the Phase 2 STP Reporting which eliminates the need to submit TFN Decs to the ATO as a separate process. Still required to get filled out for records.

2. Employment separation certificates become redundant. This is replaced with the termination reason required for Final Pays when completing payroll.

3. If you make a Lump sum E payment, you won’t need to provide Lump sum E letters to your employees.

4. Reduces reporting to more than one government agency.


Most DSP (Digital Service Providers) have had deferrals for STP 2. And Xero is fast approaching their date of 31st of March.



If all of this just makes your eyes glaze over give Concept Bookkeeping a call!

We pride ourselves on simple explanations and developing processes that work for you.



We work hard on bookkeeping...

so you dont have to.

Call Now Button