Single Touch Payroll (STP) – Phase 2

What is STP Phase 2?

The Australian government announced the expansion of the Single Touch Payroll (STP) which includes additional information. This expansion of STP, also known as STP Phase 2, reduces the burden on employers who need to report employees' information to multiple government agencies. It also helps Services Australia’s customers who may be your employee, get the right payment at the right time .

As we all are familiar with the first phase of Single Touch Payroll (STP), an ATO initiative designed to streamline the reporting of employee pay, tax withheld, and superannuation. In STP Phase 2, businesses are required to report additional information and eliminate existing reporting requirements in certain instances.

Visit this link to know more about STP Phase 2 Expansion

Visit this link to know how to Process Single Touch Payroll in the Finance application

Visit this link to view the STP Phase 2 - Transition Guide

What is the Impact?

The STP reduces business reporting requirements and enables Australian businesses to digitally engage with Government agencies in a Single Touch Process.

In STP Phase 2, you are required to provide ATO with the additional information however, the way to submit STP has not changed. As all Businesses must comply with STP Phase 2 requirements or potentially face penalties from the ATO. 

Important dates to be noted: 

What are the Key Changes?

The major key changes of the STP Phase 2 are explained below.

1. Gross Formula

The Gross is calculated for the Employee File and Header File using distinct new formulas.

Gross for Employee File

Now, the Gross for Employee File is calculated based on the new formula provided below.

STP Phase 2 – Gross Formula for Employee File 

 

 The Gross for Employee File Tuple is created for the employee as shown in the figure below.

Gross for Header File

Now, the Gross for Header File is calculated based on the new formula provided below.

STP Phase 2 – Gross Formula for Header File 

 

The Gross for Header File Tuple is created for the employer as shown in the figure below.

2. Tax File Number ‘987654321’ is no Longer Valid

The member should not report an invalid Tax File Number (TFN) that will fail to validate while processing the STP run.

You should request a replacement of the TFN Declaration from the member after confirming that the original is not valid. While awaiting updated information, you can report the member’s income using the following exemption codes:

• 111 111 111 – within 28 days since the request for the TFN Declaration was performed or

• 000 000 000 – more than 28 days since the request for the TFN Declaration was performed

In the STP Phase 2 enabled application, staff will not be able to save the TFN ‘987654321’ in the Member module once the STP Phase 2 is rolled out and will show the alert message as shown in the figure below.

Also, the system will validate the TFNs during STP processing by clicking Verify Employee Details (Mandatory). In case any member has TFN ‘987654321’, the member details will appear in the list of Invalid TFNs.

How to Generate Existing Members List with TFN ‘987654321’?

In the Staff portal application, to generate the list of the existing members having TFN ‘987654321’:

• Click Reports → Member Reports → Member Detail Report and the Member Report opens

• Select the filter option as the Financial Details option and click Export Members Report to Excel and the Members Detail Report is downloaded

• Open the CSV file to fetch the list of members by filtering TFN ‘987654321’

3. Visa Country of Existing Working Holiday Makers

You need to mandatorily report the visa country for the employees who report to tax jurisdictions outside of Australia. This is relevant for businesses with staff having specific visas (i.e., Australian residents working overseas or Working Holiday Makers).

It is mandatory to provide the visa country for each Workers Holiday Maker so that when the STP Phase 2 reporting is enabled, users will be able to update this information immediately without any impact on STP reporting.

In the Staff portal application, the Passport Country is the mandatory field in the Visa tab for the member in the Employment Details page as shown in the figure below .

4. Review/Update all Allowances/Additions Settings in the Masters as per ATO Guidelines along with their Remapped Codes

In STP Phase 2, all the Allowances and Additions are itemised separately, not just expense allowances that may have been deductible on the employee’s IITR. This means that allowances and additions that used to be reported as Gross for the income type must now be separately itemised in STP Phase 2 reporting.

Also, STP Phase 2 introduces the ability to report the deductions for Child Support Garnishee/Child Support Deduction and eliminates the need for employers to provide separate remittance advice to the Child Support Registrar while reporting through STP. However, you need to pay the required amounts directly to ATO by the date specified in your notice.

Below are the details to review/update all the allowances and additions:

1. Review Allowances and Addition Settings in Masters

2. Remap Allowances and Additions codes with new codes defined by ATO

3. Map Child Support Garnishee

4. Map Child Support Deduction

5. Change in Workers Holiday Maker Scale

As per the ATO obligation, the clients must be registered as an employer of Working Holiday Maker in case of employment or planning to employ workers who hold either:

• Working Holiday visa (subclass 417) or

• Work and Holiday visa (subclass 462)

The new Workers Holiday Maker Tax Scales are introduced in STP Phase 2. The two new tax scales added are the Workers Holiday Maker Scale - Unregistered Employer, and Workers Holiday Maker Scale - No TFN Supplied. 

To view detailed information about each Workers Holiday Maker Tax Scale, see below

1. Workers Holiday Maker Scale

2. Workers Holiday Maker Scale - Unregistered Employer

3. Workers Holiday Maker Scale - No TFN Supplied

6. Validations to Restrict User to Change the Tax Scale from Workers Holiday Maker Scale to Australian Resident Scale and Vice versa

1. As per the ATO guidelines for STP Phase 2, the staff is restricted to update to any Workers Holiday Maker Tax Scale, once the payrun for the member has been performed on the Australian Resident Tax Scale.

   In the Finance application, when the staff changes the Tax Scale of the member to any Workers Holiday Maker Tax Scale from the selected Australian Resident Scale and the payrun of the member is already performed in the selected branch (with the Australian Resident Scale), the staff will get a validation pop-up on clicking the save button as shown in the figure below and staff will not be able to change the Tax Scale.
   Similarly, in the Staff portal application, the staff is restricted to update to any Workers Holiday Maker Tax Scale, once the payrun for the member has been performed on the Australian Resident Tax Scale.

   
    

2. As per the ATO guidelines for STP Phase 2, the staff is restricted to update to any Australian Resident Tax Scale once the payrun for the member has been performed on the Workers Holiday Maker Tax Scale.
   In the Finance application, when the staff changes the Tax Scale of the member to any Australian Resident Scale from the selected Workers Holiday Maker Scale and the payrun of the member is already performed in the selected branch (with the Workers Holiday Maker Scale), the staff will get a validation pop-up on clicking the save button as shown in the figure below and staff will not be able to change the Tax Scale.
   

   Similarly, in the Staff portal application, the staff is restricted to update to any Australian Resident Tax Scale once the payrun for the member has been performed on the Workers Holiday Maker Tax Scale. 

7. Payment Date by Entity

You should ensure to submit STP run on or before the Payment Date. The Payment Date is the date when the payslip is processed. While processing the STP run, validations are in place for the Payment Date by Entity.

The Payment Date Header Tuple is created as shown in the figure below. 

In the Finance Application, this Payment Date is picked from the selected Pay Date on Payslip in the Payslip Processing screen as shown in the figure below.

Help Alerts for STP Phase 2

To streamline and implement the STP Phase 2 effortlessly, our STP Phase 2 enabled application has incorporated the help alerts in all the required screens that will guide you through the additions/modifications to process Single Touch Payroll successfully.

Help Alerts in Finance Application

A. Help Alerts in Dashboard Screen

When you open the Finance application, the action/attention required details are available in the Dashboard screen. It is recommended to read and follow the instructions provided before proceeding with the new STP process.

1. Action Required - Single Touch Payroll (STP) submission alert!

   1. Click here to submit your STP for Week Ending <date of week ending> → Click this link to open the STP Process screen

2. Attention Required - Single Touch Payroll (STP) Phase 2 rolled out
   
   Employer Obligations defined by ATO for STP Phase 2:

   1. Worker Holiday Maker employees. Click here for detailed information → Click the link to open the Client Support knowledge base for the Workers Holiday Maker details in the STP Phase 2

   2. Child Support amounts. Click here for detailed information → Click the link to open the Client Support knowledge base for the Child Support amounts details in the STP Phase 2
      
      Mandatory Things to do immediately:

   3. Click here for more information → Click the link to open the ‘Things to do: Single Touch Payroll (STP) Phase 2 rolled out' pop-up window. You need to follow the mandatory system checklist that needs to be performed before processing the new payroll and STP run.

      Key changes in Single Touch Payroll (STP) Phase 2:

   4. Click here to know the key changes done in our application as per guidelines by ATO for STP Phase 2 → Click the link to open this section in the Client Support knowledge base.

On clicking link 2c i.e., Mandatory Things to do immediately (as shown in the figure above), the Things to do: Single Touch Payroll (STP) Phase 2 rolled out pop-up window opens as shown in the figure below.

1. Review & update all allowances/additions/deductions settings in the masters as per ATO guidelines and remap to ATO defined STP allowances.

   1. Click here for more information → Click the link to open this section in the Client Support knowledge base.

   2. Click here to review the STP codes now → this link opens the STP Allowances/Addition/Deduction Code Mapping screen.

2. Replacement of Tax File Number ‘987654321’ as it is no longer a valid TFN. Click here for more information → Click the link to open this section in the Client Support knowledge base

3. Review employer worker holiday maker registration status along with the tax scale set for working holiday maker members.

   1. Click here for more information → Click the link to open this section in the Client Support knowledge base

   2. Click here to review or update → Click the link to open the Software Registration Details screen, to review the System Settings for Employer Worker Holiday Maker registration status.

   3. Click here to review the applicable member → Click the link to open the Member Payroll screen to review the correct applicable tax scale for the selected member.

4. Update the Marital status for members having tax scale: SAPTO Scale 2 - Senior Pensioners Tax Offset. Click here for more information → Click the link to open this section in the Client Support knowledge base.

5. Review the reason category mapped with the member termination reason in ‘Reason (Personnel)’ master. Click here for more information → Click the link to open this section in the Client Support knowledge base.

B. Help Alert in STP Process Screen

In the STP Process screen, an alert information message is displayed at the top-right corner of the screen. Click the hyperlink Click here, to view the detailed Client Support knowledge base regarding the STP Phase 2 expansion that will guide you to submit the STP report as per new guidelines issued by the ATO.

C. Help Alert in Allowances Master and Addition/Deduction Master Screen

In the Allowances screen, an alert information message is displayed regarding new STP Phase 2 guidelines issued by the ATO. Click the hyperlink Click here and the pop-up Changes in the ATO guidelines for reporting Allowances and Additions opens.

It is recommended to read the instructions carefully for the Allowances and Additions.

 

In the Additions and Deductions screen, alert information messages are displayed regarding new STP Phase 2 guidelines issued by the ATO.

1. All allowances and additions except reimbursements are now to be set as ‘Separately Itemise in STP’. Click here for more information. → Click the hyperlink, Click here and the pop-up ‘Changes in the ATO guidelines for reporting Allowances and Additions’ opens. It is recommended to read the instructions carefully.
   
   

    

2. ATO has defined employer obligation for transitioning the reporting of Child Support Amount to STP Phase 2. Click the info icons adjacent to Child Support Deduction and Child Support Garnishee and the pop-up ‘ATO Guidelines for Reporting Child Support Amounts’ opens. It is recommended to read the instructions carefully.
   Click here link to open this section in the Client Support knowledge base.
   

D. Help Alert in STP Allowances/Addition/Deduction Code Mapping Screen

In the STP Allowances/Addition/Deduction Code Mapping screen, an alert information message is displayed at the top-left corner of the screen. Click the hyperlink Click here to open the STP Phase 2 reporting – quick reference guide that will help you to check the common allowances with the ATO defined codes.

Help Alerts in Web Application

A. Help Alert in Create New Member

In the Create New Members page of the Staff portal application, a help icon is displayed next to the Tax Scale field. Click the help icon to view the STP Phase 2 Client Support knowledge base that will help you to understand the new changes related to the Workers Holiday Maker tax scales.

B. Help Alert in Member’s Finance Details

In the member's Finance Details page of the Staff portal application, a help icon is displayed next to the Tax Scale field. Click the help icon to view the STP Phase 2 Client Support knowledge base that will help you to understand the new changes related to the Workers Holiday Maker tax scales.

C. Help Alert in Applicant Portal for Finance

In the Finance page of the Applicant Portal application, a help icon is displayed next to the Tax Obligation Table field. Click the help icon to view the STP Phase 2 Client Support knowledge base that will help you to understand the new changes related to the Workers Holiday Maker tax scales.

Enforced STP with Validation Messages

In the STP Phase 2 enabled Finance application, the Enforced STP for payrun flag ensures timely STP submissions i.e., you will be guided to submit STP run on or before the Payment Date. By default, this flag is enabled.

To view the Enforced STP for payrun flag, click STP → Single Touch Payroll Settings and the Single Touch Payroll Settings screen opens.

For the Enforced STP for payrun flag, the validation messages listed below appear in the respective screens as explained below.

1. STP Phase 2 Submission Alert: Week-ending Submission Alert on Dashboard

Click here to submit your STP for Week Ending <date of week ending> → On clicking the Click here link, the STP Process screen opens and you will be able to submit your STP for the Week Ending.

2. STP Phase 2 Submission: Alert Message in the Confirm Shifts

In the Shift Processing Filter screen, in case the user has not submitted the STP run for the immediate last Week Ending payrun for the selected branch (the last payrun performed by the staff) for the current financial year and if the pay date for that payrun is less than or equal to the current date, an alert message is displayed on clicking Process Booked Shifts as shown in the figure below.

Click Yes to proceed with the STP submission.

3. Submit Dockets: Restrict Users to Submit Dockets until STP for the Last Payrun is Submitted

If the user has not submitted the STP run for the immediate last Week Ending payrun in the selected branch (the last payrun performed by the staff ) for the current financial year, on clicking the Submit Dockets, an alert message is displayed as shown in the figure below.

Note that submitting STP run indicates the step to Process Single Touch Payroll i.e., Submit Validated files to SSP for ATO Submission (Mandatory Step).

The user will not be able to proceed further until the STP for the last Payrun is submitted. 

4. STP Phase 2 Submission: Generate Batch for Payroll Processing

As per the ATO guidelines for STP Phase 2, it is mandatory to report all the Payments on or before the Pay Date.

In the Payslip Processing screen, click the Generate Batch to View & Print Payslips, and the alert message is displayed as shown in the figure below. To set the selected date as Pay Date, click Yes and proceed with the payslips generation.

5. Success Message of EFT File Generation Provides the Option to Submit STP for the Payrun

While EFT file generation, the success pop-up message shows the STP Submission Required information. The user can proceed with the STP submission for the Week Ending by clicking Yes or else proceed further.

6. Restricting users to change the financial year dates

In the Payroll tab of the Application Options screen, the user will be restricted to change the financial year dates in case:

• The Client has submitted at least one STP run in the current financial year

• STP run for the last payrolls that the user performed in the branches for that financial year are not submitted by the user

For the above scenarios, if the user changes the financial year dates and clicks Save, an alert message is displayed as shown in the figure below.

7. Restrict user to change the Super cut-off dates if payrun is performed for the existing cut-off date

In the Superannuation tab of the Application Options screen on modifying the Super Info, the system will check whether the user has performed the payroll for the existing Super cut-off date.

In case the payroll is already performed for the Super cut-off date of the current financial year (of the selected branch), and the user tries to change the Super cut-off date for that month, an alert message is displayed as shown in the figure below.

8. Restrict Users to Change the Super Cut-off Dates if the Cut-off date is Less than the Last Payroll Week Ending Date

In the Superannuation tab of the Application Options screen on modifying the Super Info, the system will check if the payrun is performed on the Super cut-off date for the selected branch.

If the payrun is not performed, the system will check whether the changed Super cut-off date is greater than the last payroll Week Ending date for the selected branch. In case the changed date is less than the last payroll Week Ending date, an alert message is displayed as shown in the figure below.

Validation to Generate Valid Data Files

The validations are placed to generate and validate data file that helps to provide a check to set the compliance of any output as compared to the input provided.

Validate Employee Details

To validate the Employee Details, click Verify Employee Details (Mandatory) in the Finance application as shown in the figure below. In case any validation fails in generating the valid data file, a validation message appears "Employee(s) details are invalid or missing. Please check report." Refer to the Validation details in the Invalid/ Missing Member Details screen.

Validate SAPTO Scale 2 - Senior Pensioners Tax Offset Member Scale

In case the member’s Tax Scale selected is SAPTO Scale 2 - Senior Pensioners Tax Offset, the Marital Status value is validated. If the Marital Status value is not provided in the member module of the Finance application, a validation report is generated.

The user will not be able to proceed further unless the SAPTO Scale 2 - Senior Pensioners Tax Offset validation is successful. The validation message is displayed on clicking Verify Employee Details in the application as shown in the figure below.

Validate Workers Holiday Maker Member Scale

In case the member’s Tax Scale selected is any of the Workers Holiday Maker Scales and the Passport Country is not selected, the validation message is displayed on clicking Verify Employee Details in the application as shown in the figure below.

In the Staff portal application, ensure to select the Passport Country for the member having tax scales as Workers Holiday Makers in the Employment Details Page.

Validate STP Dates

Validate the Dates while processing Single Touch Payroll.

• The Period Start Date should always be less than or equal to the Period End Date.

• The Payment Date by Entity should always be greater than or equal to the Period Ending Date.

Validate Tax File Number and Tax Scale at Generate Payslip Stage

The following validations are provided in the system for the Tax File Number and Tax Scale at the Generate Payslip Stage:

1. In case the member has TFN ‘111111111’ saved in the Member module for more than 28 days, the staff will not be able to generate the payslip.
   The validation message appears ‘Please change the TFN of the member to ‘000000000’ and the Tax Scale to ‘SCALE 4 - NO TFN BY RESIDENT OBLIGATIONS’ if the member is an Australian Resident and ‘SCALE 5 - NO TFN BY NON-RESIDENT OBLIGATIONS’ if the member is Foreign Resident as even after 28 days TFN is awaiting to be provided by the member' as shown in the figure below.

   When the Staff changes the member’s TFN to ‘000000000’ and the Tax Scale to ‘SCALE 4 - NO TFN BY RESIDENT OBLIGATIONS’ or 'SCALE 5 - NO TFN BY NON RESIDENT OBLIGATIONS’, the payslip of the member will be generated successfully.
   Note that the validation will appear for both cases i.e. if the TFN is not changed or the Tax Scale is not changed. 

    

2. In case the Working Holiday Maker (WHM) member has TFN ‘111111111’ saved in the Member module for more than 28 days, the staff will not be able to generate the payslip.
   The validation message appears ‘Please update the TFN of the member to ‘000000000’ and the Tax Scale to ‘WORKERS HOLIDAY MAKE SCALE - NO TFN SUPPLIED’ as even after 28 days TFN is awaiting to be provided by the member' as shown in the figure below.
   
   When the Staff changes the member’s TFN to ‘000000000’ and the Tax Scale to 'WORKERS HOLIDAY MAKE SCALE - NO TFN SUPPLIED’, the payslip of the member will be generated successfully.
   Note that the validation appears for both cases i.e. if the TFN is not changed or the Tax Scale is not changed.

    

    

3. In case the Workers Holiday Maker member has Tax Scale ‘WORKERS HOLIDAY MAKER SCALE’ saved in the Member module and the Employer is set as Unregistered in the Application Options, the staff will not be able to generate the payslip
   The validation message appears ‘Please update the Tax Scale of the member to ‘WORKERS HOLIDAY MAKER SCALE - UNREGISTERED EMPLOYER’ as your company is unregistered with ATO to employ a working holiday maker' as shown in the figure below.
   
   When the Staff changes the member’s Tax Scale to 'WORKERS HOLIDAY MAKER SCALE - UNREGISTERED EMPLOYER', the payslip of the member will be generated successfully.
   

    

4. In case the Workers Holiday Maker member has Tax Scale ‘WORKERS HOLIDAY MAKER SCALE - UNREGISTERED EMPLOYER’ saved in the Member module and the Employer is set as Registered in the Application Options, the staff will not be able to generate the payslip.
   The validation message appears ‘Please update the Tax Scale of the member to ‘WORKERS HOLIDAY MAKER SCALE’ as your company is registered with ATO to employ a working holiday maker' as shown in the figure below.
   
   When the Staff changes the member’s Tax Scale to 'WORKERS HOLIDAY MAKER SCALE', the payslip of the member will be generated successfully.
   

5. In case the Workers Holiday Maker member has Tax Scale ‘WORKERS HOLIDAY MAKER SCALE - NO TFN SUPPLIED’, the employer will get validation at the generate payslip stage to change the employee’s tax scale to ‘WORKERS HOLIDAY MAKER SCALE' or 'WORKERS HOLIDAY MAKER SCALE - UNREGISTERED EMPLOYER’ based on the employer Workers Holiday Maker status set in the system except in the case when the member has valid TFN number or the TFN provided is '111111111' and it has been less than 28 days since the request for the TFN declaration was performed.
   
   When the staff changes the member’s Tax Scale to ‘WORKERS HOLIDAY MAKER SCALE' or to the 'WORKERS HOLIDAY MAKER SCALE - UNREGISTERED EMPLOYER’, the payslip of the member will be generated successfully.

Pay Event Header File

Payer Postal Address

In Payer Postal Address following elements are added:

• Payer Postcode

• Payer Country Code 

The following elements are removed:

• Payer Address Line 1

• Payer Address Line 2

• Payer Suburb/ Town

• Payer State/ Territory

The Payer Postal Address Header Tuple is created as shown in the figure below.

Child Support Deductions

Child Support deductions arise from a legal agreement administered by Services Australia - Child Support for a separated parent, to pay periodic amounts of child support from their salary and wages for the benefit of their child or children. These periodic amounts are advised to both the child support employer and employee via a child support account statement, detailing recent payments transferred to the employee and ongoing liabilities for child support to the employer. Child support deductions must continue to be withheld and reported until another notice is received from Child Support to alter or cease the previous instruction.

Where an employer reports these amounts through STP, it will extinguish their obligations to separately report these amounts directly to the Child Support Registrar (the Registrar). Employers who do not report these amounts under STP are still required to report to the Registrar. Where the Registrar has given written notice to employers to deduct a specified amount from employees, employers are obliged to withhold money from employees and pay it to the Registrar.

Two different types of Child Support Amounts can be reported through our Finance application:

1. Child Support Deductions (D)

2. Child Support Garnishees (G)

Mandatory Obligations to Report Child Support Amounts Through STP Phase 2

Employers may voluntarily choose to report their child support amounts through STP Phase 2 and may elect to commence reporting child support amounts upon/after transitioning to STP Phase 2. Employers may choose to move from STP Phase 2 in order to be able to report child support amounts.

The following transition rules apply when the employer elects to report child support amounts via STP Phase 2:

• The STP report must be accompanied by the existing child support report form and manually provided to the Child Support Registrar for the pay period amounts by the employer. Manual reporting can be completed with the child support deductions report form (CS4964) using existing Child Support channels.

• Where an employer is commencing reporting child support garnishee amounts via STP, the payment instructions the employer was previously using will need to be updated, to ensure the employer uses their employer reference number, instead of the previously used employee reference number. A new S72A garnishee notice will be issued by the Child Support Registrar to the employer upon his request. If an incorrect payment reference number is used, Child Support will not be able to reconcile the employer’s child support record.

With the employer completing both an STP report and a manual report for the same period, Child Support is able to calculate the initial period amounts associated with each employee.

Child Support Deduction

The Child Support Deduction is a fixed dollar amount for each pay period. In STP Phase 2, the employer must report child support amounts to the Commissioner on or before the employee’s pay date.

An employer’s obligations are satisfied when child support amounts are reported and also paid directly to the Child Support Registrar. If an employer does not notify the Commissioner of Taxation via STP, the employer must adhere to their notification obligations under section 47 of the Child Support (Registration & Collection Act), which requires the employer to report directly to the Child Support Registrar.

In the Finance application, open the Additions and Deductions screen to declare the Child Support Deduction.

To open the Additions and Deductions master screen, select Master → Payroll → Additions Deductions.

In the Additions and Deductions, a new checkbox is added as Child Support Deduction. You can either select the Child Support Deduction or Child Support Garnishee checkbox to report the child support amounts. For deduction, select the Child Support Deduction checkbox and for garnishee, select the Child Support Garnishee checkbox.

The Separately Itemise in STP checkbox is selected by default in a disabled mode in case of the Child Support Deduction checkbox is checked.

STP Phase 2 introduces the ability to report the deductions for Child Support Deduction, eliminating the need for employers to provide separate remittance advice to the Child Support Registrar while reporting through STP. However, you will need to pay the required amounts directly to ATO by the date specified in your notice.

In case you are reporting Child Support Deduction in STP Phase 2, you need to select the deduction as Child Support Deduction in the Addition and Deduction master and map the deduction in the Single Touch Payroll Allowance Codes Mapping screen.

• Click STP → Allowances Mapping and Single Touch Payroll Allowance Codes Mapping screen opens

• Now, you need to map Codes defined by ATO for Allowances/Deductions with the Codes available in the System for Allowances/Additions/Deductions for Child Support Deduction

• For Deduction type as Child Support Deduction map with Code as ‘D’ as defined by ATO

In case codes defined by ATO for Allowances/Deductions are incorrectly mapped with the Codes available in the System for Allowances/Additions/Deductions for the Child Support Deduction, a validation message is displayed as shown in the figure below.

The Child Support Deduction (D) Tuple is created if the child support deduction for that payrun exists as shown in the figure below.

Child Support Garnishee (G)

Reporting of Child Support Garnishee is optional for employers and is not mandated by Child Support law. In STP Phase 2, the employer may report Child Support Garnishee amounts to the Commissioner on or before the employee pay date.

The Child Support Garnishee (G) requires an employer to deduct a percentage of the employee’s income, lump sum, or a fixed amount for each pay period. You should report these amounts in your STP report as Deduction Type 'G'.

Open the Addition and Deduction master screen in the Finance application to select the Child Support Garnishee checkbox against the deduction you need to select as child support garnishee.

Map Child Support Garnishee

As defined for the Child Support Deduction, you can map Codes defined by ATO for Allowances/ Deductions with the Codes available in System for Allowances/ Additions/ Deductions for Child Support Garnishee

• For Deduction type as Child Support Garnishee map with Code as ‘G’ as defined by ATO

In case codes defined by ATO for Allowances/ Deductions are incorrectly mapped with the Codes available in System for Allowances/ Additions/ Deductions for Child Support Garnishee, a validation message is displayed as shown in the figure below.

The Child Support Garnishee (G) Tuple is created if the child support garnishee for that pay run exists as shown in the figure below.

Run Date/ Time Stamp

The Run Date/ Time Stamp must always be set to the date/time when the YTD amount is attributed discretely to the pay result (created by the pay run) reported on the Submit action. This is the date when the payment is performed by an entity and picks the value of the date/time when the payrun is finalized .

The Run Date/Time Stamp tuple is created that shows the date/time when the payment was done by an entity. The timestamp is shown in UTC format that includes the Z for Zulu time to allow the ATO to convert to a consistent local time.

BMS GUID

The BMS GUID is a unique business identifier and is followed as per standards for the client. This BMS GUID is used to manage the reporting of payroll information to the ATO via STP. This unique identifier is used by the employer that acts as a serial number to identify which instance of the business’s payroll software created the data in the pay event. This accommodates businesses that have more than one payroll system and businesses that change from one payroll system to another.

The Entire OnHire team has configured your BMS GUID Identifier. This BMS GUID is a non-editable field in the Single Touch Payroll Settings screen of the Finance application.

In case the BMS GUID does not exist in your application, a validation message ‘STP GUID is not configured in the application. Please contact EntireHr Support Team to configure it' appears on clicking Process Single Touch Payroll.

The BMS GUID Header Tuple is created as shown in the figure below.

Pay Event Employee File

Tax Treatment/Income Stream Codes

The Tax Treatment and Income Stream Codes are generated based on the selected Tax Scale for the employee and are sent to ATO. The Tax Treatment code is a six-character code and the Income Stream Type Code is a three-character code for each employee .

Refer to the Tax Scales and their corresponding Tax Treatment and Income Stream Codes in the below table for any particular Tax Scale:

In the Member Payroll, based on the selected Obligations, the Tax Treatment codes are generated by default in the System.

The Tax Treatment Code Tuple is created after selecting the Tax Obligations as shown in the figure below.

The Income Stream Type Code Tuple is created after selecting the Income Stream as shown in the figure below.

Commencement Date

The Commencement Date is mandatory for the pay events with a Pay/Update date after ‘30/06/2020’. If the employer does not have a historical commencement date, the default value of ‘01/01/1800’ will be reported.

The Commencement Date Tuple is created that shows the employment start date.

Employment Basis Code

The Employment Type is declared in the TFN Declaration form of the member in the web application.

If the Employment Type is not declared by the member in the TFN Declaration form, in that case, the Employment Basis Code is picked from the Employee Type in the Member Payroll of the Finance application. This captures Employment Basis Code and is used in the STP.

The Employee Type ‘C' will be reported for Casual, ‘P’ for Part Time, and, 'F’ for Full Time as the Employment Basis Code. In case the Employee Type is different than the provided options, in that case, Employee Type reported will be Casual (C).

The Employee Basis Code Tuple is created that shows the employment type as Full Time (F), Part Time (P), or Casual (C).

Cessation Date

In case your employees leave the organization, reporting their cessation date and the reason reduces the need for you to provide a separation certificate .

The Cessation Date Tuple is created that shows the employment end date.

Cessation Type Code

As per ATO guidelines for STP phase 2, it is mandatory to report the termination reason in the Reason Category for the terminated members.

In the Reasons (Personnel) Master of the Staff portal application, review the Reason Category, in case the termination reason for the Subgroups selected is 'MBR TERMINATED' for the member.

The Termination Category can be Voluntary (V), Ill health (I), Deceased (D), Redundancy (R), Dismissal (F), Contract Cessation (C), or Transfer (T).

At the time of STP submission, in case Reason Category is not selected for the terminated members, by default Cessation Type Code 'R' is selected.

Refer to the Cessation Type and their corresponding codes in the below table for any particular cessation type:

The Cessation Type code mapped against the Reason Category is reported as the Cessation Type Code to ATO at the time of STP submission.

The Cessation Type Code Tuple is created that shows the Reason Category as Voluntary (V), Ill health (I), Deceased (D), Redundancy (R), Dismissal (F), Contract Cessation (C), or Transfer (T).

SAPTO Scale 2 - Senior Pensioners Tax Offset

As per ATO guidelines for STP phase 2, it is mandatory to report the Marital Status for the members having tax scale as SAPTO Scale 2 - Senior Pensioners Tax Offset.

In the Member Payroll screen of the Finance application, when the user selects ‘SAPTO Scale 2’ as the Tax Scale, a hyperlink appears to update the Marital Status as shown in the figure below. Click the link to update the Marital Status as Single, Married, or Illness Separated.

On selecting any one of the options, the following tax treatment code is included:

• for Single → Char 2 is 'S'

• for Married → Char 2 is 'M'

• for Illness Separated → Char 2 is 'I'

Click ‘Save Obligations Details’ to save the Member Obligation Details.

In the Staff portal application:

• In the Create New Members page, the user needs to report the Marital Status of the members having the tax scale as SAPTO Scale 2 - Senior Pensioners Tax Offset. In the Create New Members page, when you select the Tax Scale as SAPTO Scale 2, click the hyperlink to select the Marital Status as shown in the figure below.

• For the existing member, the user needs to report the Marital Status of the members having the tax scale as SAPTO Scale 2 - Senior Pensioners Tax Offset. In the Financial Details page, when you select the Tax Scale as SAPTO Scale 2, click the hyperlink to select the Marital Status as shown in the figure below.

In the Applicant portal application, an applicant needs to report the Marital Status having tax scale as SAPTO Scale 2 - Senior Pensioners Tax Offset. In the Finance page, when the applicant selects the Tax Obligation Table as SAPTO Scale 2, click the hyperlink to select the Marital Status as shown in the figure below.

How to Generate Existing Members List having Tax Scale as “SAPTO Scale 2 - Senior Pensioners Tax Offset”?

In the Finance application, to generate the list of the existing members having Tax Scale as SAPTO Scale 2 - Senior Pensioners Tax Offset:

• Click Reports → Member → Member Finance Details and the Finance Details (Member) pop-up window opens

• In the Obligation Table, select SAPTO SCALE 2

• In the Report Data, select Finance and click Report, and the Member Finance Details report is generated that includes the list of members with the SAPTO Scale 2 as shown in the figure below

Workers Holiday Maker

As per the ATO obligation, the clients must be registered as an employer of Working Holiday Maker in case of employment or planning to employ workers who hold either:

• Working Holiday visa (subclass 417) or

• Work and Holiday visa (subclass 462)

The new Workers Holiday Maker Tax Scales are introduced in STP Phase 2. The two new tax scales added are Workers Holiday Maker Scale - Unregistered Employer, and Workers Holiday Maker Scale - No TFN Supplied. 

Now the Workers Holiday Maker Tax Scale is categorised as Workers Holiday Maker Scale, Workers Holiday Maker Scale - Unregistered Employer, and Workers Holiday Maker Scale - No TFN Supplied

In the Obligation tab of the Member Payroll screen, on clicking the Working Holiday Maker checkbox, the Tax Scale as Workers Holiday Maker Scale is selected.

Workers Holiday Maker Scale

When the Employer of Workers Holiday Maker (WHM) is Registered, the Workers Holiday Maker Scale is selected as shown in the figure below.

As per the ATO guidelines, before making any payments to WHM employees, the employer must register with the ATO as a Working Holiday Maker Employer and must be registered for PAYG (pay as you go) withholding tax. 

The Employer Worker Holiday Maker registration status can be viewed/updated from the System Settings tab of the Software Registration Details screen in the Finance application as shown in the figure below.

Review the settings and change the status to Registered/Unregistered in the Employer Worker Holiday Maker registration status. Note that by default Registered status is selected for WHM.

To update the Employer Worker Holiday Maker registration status in the System Settings tab:

• Click Update Software Registration Details

• Select the new registration status and click Update Software Registration Details and the details are updated successfully.

You can also set the Employer Worker Holiday Maker registration status in the Staff portal application:

• Click the user login drop-down in the Entire Recruit application and open the Application Settings

• In the Application Settings, click System Configurations

• In the Other Settings, set the Employer Worker Holiday Maker registration status as Registered or Unregistered.

Sliding Rate Obligations

For the Workers Holiday Maker scale, below is the Sliding Rate Obligations range applicable.

Workers Holiday Maker Scale - Unregistered Employer

In case the Client is not registered as an employer of Workers Holiday Maker, review the setting Employer Worker Holiday Maker registration status is set to Unregistered.

For the Workers Holiday Maker - Unregistered Employer tax scale, below is the Sliding Rate Obligations range applicable.

In the Member Payroll screen, when the user selects ‘Workers Holiday Maker Scale - Unregistered Employer’ as the Tax Scale, the Tax treatment code generated is HUXXXX.

The Tax Treatment Code Tuple is created after selecting the Tax Obligations as the ‘Workers Holiday Maker Scale - Unregistered Employer ’ scale as shown in the figure below.

Workers Holiday Maker Scale - No TFN Supplied

The Workers Holiday Maker Scale - No TFN Supplied is selected when a Workers Holiday Maker member fails to provide TFN and it has been more than 28 days since the request for the TFN Declaration was performed. When the STP file is generated for the member with this scale, the member’s home country and Income stream type as WHM are selected.

Sliding Rate Obligations

For the Workers Holiday Maker - No TFN Supplied tax scale, below is the Sliding Rate Obligations range applicable.

In the Member Payroll screen, when the user selects ‘Workers Holiday Maker Scale - No TFN Supplied’ as the Tax Scale, the Tax Treatment code generated is HFXXXX.

The Tax Treatment Code Tuple is created after selecting the Tax Obligations as the ‘Workers Holiday Maker Scale - No TFN Supplied’ scale as shown in the figure below.

How to Generate Existing Members List having TFN ‘000 000 000’?

In the Staff portal application, to generate the list of the existing members having TFN ‘000000000’:

• Click Reports → Member Reports → Member Detail Report and the Member Report opens

• Select the filter option as the Financial Details option and click Export Members Report to Excel and the Members Detail Report is downloaded

• Open the CSV file to fetch the list of members by filtering TFN ‘000000000’

Validations for Workers Holiday Maker

1. In the Finance application, in case the user selects any of the Workers Holiday Makers Tax Scale i.e., ‘Workers Holiday Maker Scale’, ‘Workers Holiday Maker Scale - No TFN Supplied’ or ‘Workers Holiday Maker Scale - Unregistered Employer’ and the Worker Holiday Maker checkbox is not selected, the validation message will appear as shown in the figure below.

2. In the Applicant portal application, in case the user selects Tax Obligation Table as Workers Holiday Maker Scale, or Workers Holiday Maker Scale - Unregistered Employer, or Workers Holiday Maker Scale - No TFN Supplied, and the Working Holiday Maker checkbox is not selected, the validation message appears ‘Invalid Tax Scale selection. Please check the Working Holiday Maker option to save the selected Tax Scale’.

Select the Working Holiday Maker checkbox to save any of the WHM tax scales in the Finance page of the Applicant portal application.

3. In the Applicant portal application, in case the user selects any other tax scale other than the Workers Holiday Maker Scales, and the Working Holiday Maker checkbox is selected, the validation message appears ‘Invalid Tax Scale selection. Please uncheck the Working Holiday Maker option to save the selected Tax Scale’.

Passport Country

In the Staff portal, the Passport Country in the Visa of an employee is selected using the drop-down field. In Passport Country, the user needs to select the required country from the drop-down.

Country Code

The Country Code is reported for the home country of employees who are Inbound Assignees or Working Holiday Makers. For example, if you make a payment to an Australian resident working overseas or to a working holiday maker, you need to provide information about the host or home country.

The format for the Country Code is two-character alpha characters as per ISO 3166-1 alpha-2 international standards.

The Country Code Tuple is created after selecting the Passport Country as shown in the figure below. 

PAYGW Amount

The PAYGW Amount reports the payments withheld for the employees and must be included separately as YTD amounts you have withheld from each income type. This is the YTD PAYGW Amount withheld from the gross amounts for the relevant income stream.

The PAYGW Amount Tuple is created after providing the amount withheld for the employee as shown in the figure below.

Overtime

The Overtime reports the YTD Overtime amount for the specific income type. The Overtime includes the work:

• beyond their ordinary work hours

• outside the agreed number of hours

• outside the spread of ordinary hours (the times of the day ordinary hours can be worked)

The Overtime Tuple is created for the YTD Overtime for the employee as shown in the figure below.

Bonuses and Commissions

The Bonuses and Commissions payments are paid to employees to reward their performance, service, or for meeting a specific goal. Only pre-sacrifice amounts that are classified as OTE should be included as bonuses and commissions.

Examples of Bonuses and Commissions include Christmas Bonuses, Retention Bonus, Sign-on Bonus for new employees, Performance Bonus, Referral Bonus, Bonus labeled as ex-gratia (in respect of ordinary hours worked), Return to Work Bonus after Paternal Leave or Commission Payment.

Map all the Bonuses and Commissions with the code type ‘BC’ of Codes defined by ATO for Allowances/Deductions with Codes available in the System for Allowances/ Additions/ Deductions in the STP Allowance Mapping screen as shown in the figure below.

The Bonuses and Commissions Tuple is created for the employee who received this amount as shown in the figure below.

Allowances

In STP Phase 2, all the Allowances and Additions are itemised separately, not just expense allowances that may have been deductible on the employee’s IITR. This means that allowances and additions that used to be reported as Gross for the income type must now be separately itemised in STP Phase 2 reporting. 

Review Allowances and Addition Settings in Masters

You must ensure the following points before processing the STP run:

• In the Allowance master, all the allowances (except reimbursements) are already selected as Appear Separately on Group Certificates.

• In the Additions Deductions master, all additions are already selected as Separately Itemise in STP in the Additions and Deductions master screen as shown in the figure below.    

The Allowances Tuple is created for the employee that shows the allowance type, and amount details as shown in the figure below.

Remap Allowances and Additions Codes with New Codes Defined by ATO

The STP Allowances and Additions codes will be remapped by the Entire OnHire team with the new codes defined according to ATO guidelines.

To view the mapping of the STP Allowances/ Additions Codes for the STP:

• Click STP → Allowances Mapping and the Single Touch Payroll Allowance Codes Mapping screen opens

• The updated Allowances/ Additions/ Deduction codes provided by ATO are available in the Codes defined by ATO for Allowances/Deductions section and are already remapped with the Codes available in the System for Allowances/ Additions/ Deductions (based on mapping information provided by you)

• You need to review the already mapped codes in the Codes available in the System for Allowances/ Additions/ Deductions section

Click to view a reference guide for mapping common allowances/additions with ATO defined codes.

Refer to the Allowance type and corresponding Code/ Sub Type defined by ATO in the below table .

Deductions

STP Phase 2 introduces the ability to report the deductions for Child Support Garnishee/ Child Support Deduction and eliminates the need for employers to provide separate remittance advice to the Child Support Registrar while reporting through STP. However, you need to pay the required amounts directly to ATO by the date specified in your notice.

Refer to the Deduction type and their corresponding codes defined by ATO in the below table.

The Deduction Tuple is created for the employee that shows the deduction details as shown in the figure below.

Salary Sacrifices

The Salary Sacrifices Tuple in the employee file includes the 'S' code in TypeC and the amount of salary sacrifices in PaymentA.

Superannuation

The Superannuation Tuple in the employee file includes the 'L' code in EntitlementTypeC and the amount of Guarantee Super in EmployerContributionsYearToDateA. 

ATO’s Position Papers for STP Expansion

The ATO has provided detailed information for Single Touch Payroll (STP) Phase 2 that includes various Position Papers. These Position Papers provide a detailed context with examples to help and implement STP Phase 2 efficiently.

For your quick reference, click the required link to read the instructions provided in the respective STP Phase 2 Position Papers.

Click to view the STP Phase 2 Transition Guide.