Single Contact Payroll (STP) Section 2 will see Australian companies construct on their current STP reporting to share extra data with the ATO and different authorities businesses 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 via STP in Xero might want to proceed via 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 via to 31 March 2023, that means Xero Payroll prospects can have till the New 12 months to activate STP Section 2. Nevertheless, you may get your knowledge prepared at present. The truth is, it is suggested that you just full every stage sequentially as they’re made accessible 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 employees, like whether or not they’re an worker or contractor.
Stage two – Rolling out late September: You’ll must establish 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 under.
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 varieties to satisfy the brand new reporting necessities.
Stage two entails the introduction of recent earnings classes
STP Section 2 introduces a set of recent ATO earnings classes to be used in your pay gadgets. It’s because gross quantities for every earnings kind will now should be reported as a separate, itemised quantity. What is going to this appear like in motion beneath stage two of the transition inside Xero? You’ll now must itemise and report on the next particular person earnings elements:
When all these funds are accurately itemised in your STPl submitting, the information will be shared throughout authorities departments (like Providers Australia). You’ll be able to be taught extra in regards to the means of updating your earnings classes in Xero Payroll right here:
It’s necessary to notice that quantities you pay to workers via STP that usually are not individually itemised will probably be reported as gross or odd time earnings (OTE). Solely pre-sacrifice quantities which might be categorized as OTE needs to be included as gross. Be taught extra about gross reporting.
We’ll be launching the pay merchandise transition instrument that can assist you with stage two
Xero has constructed a transition instrument 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. Consequently, it’s possible 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 should be changed as they’ll routinely report accurately to the ATO via STP Section 2.
| You’ll need to replace every of your lively worker profiles and mark that step as full within the STP Section 2 portal. The pay merchandise transition instrument will solely be made accessible as soon as Step 1 has been marked as full. |
How one can disaggregate all function allowances for STP Section 2
Many fashionable awards embody allowances which might be added to an worker’s hourly price and are paid for all functions of the award (resembling when calculating funds for penalty charges, time beyond regulation and go away). Paying all function allowances to workers relies on the particular necessities of the fashionable award that every worker falls beneath.
In the event you require details about the allowances that could be relevant in your workers beneath a specific fashionable award, go to the Truthful Work Ombudsman’s web site or search unbiased authorized recommendation.
With STP Section 2, you need to individually report all function allowances towards the related allowance kind in Xero Payroll. You’ll be able to be taught extra about easy methods to disaggregate all function allowances in Xero Central.
You may be notified inside Xero Payroll when every stage is obtainable
The transition to STP Section 2 reporting will probably be gradual, and we encourage all prospects to motion the steps as quickly as they change into accessible inside Xero Payroll. This will probably be made clear to you inside your account, full with steerage on what must be executed (as would be the case for the levels to observe).
Begin planning in your transition now
When you’ll have the time to make all related modifications, the very best strategy is to get began as quickly as attainable. This may require some planning to make sure you have all the knowledge wanted. In the event you’re uncertain about updating your payroll knowledge for STP Section 2, converse to your advisor.
Xero’s instructional sources and transition instruments will allow you to via 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 data on STP Section 2? Take a look at our Useful resource Hub, information to STP Section 2, timeline infographic and this helpful guidelines. You too can go to Xero Central or check with the ATO’s employer reporting pointers.