Single Touch Payroll Phase 2: Communications and stakeholder management

Single Touch Payroll Phase 2: Communications and stakeholder management

by George Johnson

27 July 2022

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To date, a large focus for employers of Single Touch Payroll Phase 2 (STP2) has been working with Digital Service Providers (DSPs) to ensure that the right infrastructure is in place to facilitate the correct reporting of data to the ATO. As employers implement and ‘go-live’ with STP2 reporting, it is equally important to ensure that employees and other internal stakeholders are aware of the changes occurring and how it will impact them. 

Under Single Touch Payroll Phase 1 (STP1) reporting, the key impact to employees was that would be able to view their income, tax and superannuation year to date records via their MyGov account, and there was no longer a requirement for employers to provide payment summaries at year end. 

The difference between STP1 and STP2 is that employment income data will now be shared directly with government agencies such as Services Australia, with a view to achieving the following:

  • Improving Services Australia customers’ experience by pre-filling information into on-line forms for review or amendment as required;

  • Supporting Services Australia customers by prompting them to update their income estimates to enable the ‘right payment at the right time’;

  • Helping Services Australia customers avoid inadvertently advising that they don’t need to lodge a tax return. This will ensure their Family Tax Benefit is accurate; and

  • Reducing the employer burden by decreasing contact between employers and Services Australia for activities including:

    • reporting child support deductions and garnishee amounts

    • establishing child support employer withholding.

Furthermore, the changes will also impact what is reported on employees’ income statements, which will now include a greater breakdown of remuneration including overtime and allowances. 

Expanding the reporting requirements of allowances will provide employees with greater oversight of how much they are paid for the different activities/roles undertaken. This could potentially lead to HR and Payroll teams receiving additional queries as to how payments are calculated.

Develop an employee and stakeholder communications plan

The importance of developing an effective communications plan to ensure employees are aware of the key STP2 changes that will be occurring (as well as those that won’t be changing), and how they may be impacted should not be overlooked. 

Some communication methods that employers can deploy to ensure employees are well informed and prepared for the changes include: 

  • Detailing key reporting changes for employees on the ‘People’ intranet site;

  • Providing guidance and information through the Employee Self Service (ESS) solution;

  • Development of staff email communications detailing key reporting changes and updates to the MyGov site; and/or

  • Inclusion of a message on the employees’ payslip(s) to review their MyGov site for reporting changes.

Taking the time to communicate with employees early and often will help in a number of ways, including:

  • Helping employees understand how their income will be reported to the ATO and other government agencies; and

  • Reducing the number of queries received by HR and Payroll departments, enabling them to focus on ensuring a successful roll out of STP2 reporting. 

Having a clearly defined communications strategy and fully understanding the key changes being introduced under STP2, will enable employers and their employees to benefit from greater efficiencies in managing their end-of-year reporting obligations. 

Further information can be found at the What employees need to know page on the ATO website.

For any questions, please contact your Payroll Advisory specialist.

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