Transitioning to single touch payroll (STP) phase 2: what it means for small businesses
Every small business owner in Australia must report payroll information to the Australian Taxation Office (ATO). Failing to do so is definitely a non-compliance with tax regulations, which could result in negative consequences. Well, the Single Touch Phase 1 reporting has shut down from February 27th of 2025. So, now you should move towards Single Touch Phase 2 to start payroll reporting to the authorities. Through knowledgeable Payroll Accountants Epping, you can delve deeper into the process. Transitioning from STP1 to STP2 means businesses now have to provide detailed payroll information using recommended software. The expanded data collection system, upgraded and regulated by ATO, would reduce administrative burdens on employers.
Consequences of not Moving to STP2
- Non-complying Tax Obligations
Payrolls processed through traditional software won’t be reported to ATO. This includes updates and reversals that would not comply with tax regulations and consequently lead to penalties.
- Pending Employees EOY Completion
Not moving to the updated reporting system won’t let you complete of end-of-year finalization for employees. They won’t be able to file their tax returns due to incomplete income statements.
- Unsubmission of STP Reporting
You cannot fix an unsubmitted or rejected STP1 information by not moving to the STP2 system. ATO won’t be able to provide you with the current year payroll totals for your business.
Get Epping Payroll Solutions from Expert Accountants
Transitioning to STP2 is mandated by ATO, and being a small business, you can’t bypass it. Moving is challenging for SMEs due to complex reporting requirements, updated systems, and time consumption. But you don’t need to worry, as professional payroll accountants can help. They can review existing payroll processes and provide expert guidance through the process. Accountants can assist in key areas of:
- Configuration & Mapping
Accountant for Payroll Epping, ensure that your digital service provider (DSP) is updated to the STP-2 enabled version. They can re-map your existing payroll data in the software to align with the new phase of ATO reporting. Also, accountants can separate gross pay into several components, like salary, overtime, and bonuses.
- Reviewing & Revising Data
Accountants review existing payroll data to identify irregularities before initiating the transition process. They ensure moving from STP1 to STP2 with exact employee information such as name, address, and DOBs. Also, experts ensure data integrity while mapping fields between old and new systems to avoid discrepancies and inaccuracies.
- Reporting Compliance & Guidance
Epping Payroll Accountants guide you explicitly through new reporting requirements for various income types and tax codes. They guide you about the accurate reporting of child support deductions, superannuation, and employment termination. Moreover, accountants guide for end-of-year finalization process by navigating different transitioning methods to ensure seamless completion of transitioning.
Consult Kirpa Tax for Payroll Solutions in Epping
We offer top-notch support to small businesses for payroll compliance, STP2 reporting, and accounting queries. Our accounting services are delivered through a tailored approach to meet your business needs. Also, we keep you updated on the latest regulations and solutions to stay compliant with ATO requirements.
FAQ’s
What is the concept of STP2 for businesses?
This system requires employers to provide information of payroll data in more detail to the ATO. This includes allowances, leaves, employee tax codes, and overtime payments.
When did STP2 start by ATO?
This reporting system commenced on January 1st of 2022, with mandatory reporting regulations. You can move to STP2 by consulting Payroll Accountants Epping.
Are there any major changes in STP2?
Division of gross income, paid leave reporting, bonuses, allowances, and paid leave are key changes. Contact Kirpa Tax for Epping Payroll Solutions to comply with ATO regulations.
Should I report employment termination reasons?
Under STP2, reporting employee termination reasons is mandatory for ATO for small businesses. Non-reporting leads to non-compliance with ATO regulations and penalties imposed by the authorities.
How do I prepare my business for STP2 reporting?
An Accountant for Payroll Epping will review your payroll setup, update tax codes, and ensure accurate STP1 to STP2 transition. Kirpa Tax ensures a seamless move to the new ATO reporting system for your business.
Are there penalties for non-compliance with STP2 requirements?
Yes, you have to pay a fine for every missed report as per STP2 ATO regulations. For small to large businesses, it can vary from 1050 to 5250 AUD per missed report.
Why should I choose Kirpa Tax for payroll services?
We offer expert guidance that ensures your business meets payroll compliance. Additionally, we possess in-depth knowledge of STP2 reporting and transitioning from STP1.