STP2 FAQs

STP2 FAQs

This FAQ is to be considered in conjunction with resources available on the ATO website. The ATO has asked software developers, such as Sybiz, to refer back to ATO resources rather than re-publish and maintain those same resources. These FAQs serve to connect you to the ATO resources and also provide context around how to process and report various items using Sybiz Visipay.

These FAQs are updated regularly so be sure to return whenever a question arises. Alternatively, you can use your favourite search engine to look for answers, just preface your search with: Visipay STP2.

What is STP Phase 2?

STP2 Reporting through Sybiz Visipay and the Sybiz Employer Portal

Glossary

What is STP Phase 2?

1. What is Single Touch Payroll Phase 2?

Single Touch Payroll Phase 2 (STP2) is an expansion of the initial Single Touch Payroll (STP1) program. The ATO is expanding the current reporting system to include more information about employers and employees which will help with the administration of reporting multiple government agencies and social security information. 

2. What is changing with STP2?

Some of the key changes outlined by the ATO include the requirement/ability to report:

• Employment basis (i.e. whether an employee is full-time, part-time or casual)
• Tax treatment (i.e. how withholding tax was calculated)
• Cessation type (i.e. the reason why a staff members employment ceased)
• Child support garnishees and deductions (optional but reduces alternate reporting - supported from version 24.00)
• Income type and country code (to identify specific tax obligations)
• Disaggregation of gross (i.e. breaking down income to include bonuses, commissions, paid leave, overtime and more)
• Salary sacrificed amounts

There are also changes being introduced to how lump sum payments are categorised and reported and the ability to report previous Business Management Software IDs and Payroll IDs when you have had changes to your business and/or payroll software that you have been unable to zero update.

A full outline of the expansion has been provided by the ATO and is available from their website.

3. What isn't changing with STP2?

Although there are a lot of changes coming, it is important to note that there are many things that are not changing, such as how you submit your STP report and when you are required to submit your reports. Also, the nature of what is taxed is not changing.

4. What is changing for employees with STP2?

Employees should not see much impact in general as a result of STP2 coming into effect. However, they may see some additional items on their payslips to reflect the additional reporting requirements from the ATO from the onset of STP2. 

5. When does STP2 start?

STP2 was mandated to begin on 1 January 2022, however Sybiz was granted a deferral until 1 November 2022 (this was recently extended from 1 July 2022).

6. Does each business need to apply for their own deferral?

Sybiz customers who are already reporting STP1 through Sybiz Visipay will not need to apply for a deferral for STP2 separately, unless they have a genuine need to further defer beyond 1 November 2022. In which case they will need to apply for their own deferral and it is recommended to advise your Sybiz Business Partner of your deferral.

Reporting STP2 through Sybiz Visipay

The Sybiz Employer Portal has a separate section for STP2 Submission History due to the different structure of data compared to STP1. When using the STP v2 API Submission History for the first time, be sure to check the filters are set appropriately, otherwise submissions may not display.

1. What version of Sybiz Visipay do I need to be on to report via STP2?

Sybiz Visipay 22.20 (June 2022) is the minimum version for STP2 reporting. However, any customers who will be salary sacrificing allowances from 1 November 2022 when STP2 reporting begins in Sybiz Visipay, will need to be on version 22.22. 

We also recommend that customers who are not salary sacrificing allowances upgrade to version 22.22, or the latest version available at all times.

2. Can I upgrade to v22.20 before I roll into the new financial year?

Yes - you can upgrade to Sybiz Visipay 22.20 as soon as it is made available. STP2 reporting cannot start until you have rolled into the 2022/23 financial year and once Sybiz’s deferral has expired on 31 October 2022.

3. Do all pay items now need to be reported under STP2?

No. In general, there are no changes to what is reportable and what is not under, with one exception being 'salaray sacrifice other'. However, STP2 requires significantly more breakdown of what is reported, meaning additional pay items and more detail when processing is required to complete STP2 reporting.

Prior to STP2 it was possible to successfully achieve reporting outcomes with less structured and in some cases, incorrectly configured pay items. STP2 is far more rigid and will require additional pay items and a little more care to be taken when processing.

4. I have a question about how to report a certain pay item, where can I get information?

The ATO should be your starting place and a handy, comprehensive list of pay items and the required reporting can be found here on the ATO website. Using that information should be enough to guide you, however, we have provided separate information for how to process certain types of leave and non-super salary sacrifice (salary sacrifice other).

5. I won’t be ready to start reporting under STP2 by 1 November 2022, what do I need to do?

You need to request a deferral from the ATO. 

6. I have a deferral for STP2 past 1 November 2022 - can I still upgrade to Sybiz Visipay 22.20?

Yes. STP2 is set to begin reporting on 1 November 2022 in Sybiz Visipay 22.20, however this can be updated to reflect your alternate deferral date.

7. Can I start adding the required allowances, deductions, earnings and salary sacrifices for STP2 into Sybiz Visipay etc. now?

Yes, but generally the new pay items should not be used until the 2022/23 financial year has commenced and you have upgraded to version 22.20. If you edit an existing pay item it can continue to be used as normal in the interim but do not recategorise Other allowances into the new categories of Tools, Qualifications or Tasks until the new financial year.

8. Do I need to add all new allowances, or can I just edit existing allowances?

You can edit existing allowances for the most part. However, Other allowances that are to be recategorised from other into the new categories of Tools, Qualifications or Tasks must not be changed before the new financial year. It is strongly recommended to create new items in this instance.

9. I’m setting up some new pay items for various types of leave and I can see new Categories for Ancillary & Defence Leave, Workers Compensation & Paid Parental Leave but I cannot see options for Cash Out and Leave on Termination, why is that?

New categories have been added to support the new reporting requirements for non-accruing leave. Leave that accrues has its reporting category attributed when added to a pay slip, but a default can be configured using the elipsis alongside the Leave Type when adding/editing the relevant earning pay item in Lookups.

10. On occasion my staff cash out a portion of their leave, how do I set up a pay item for this?

Generally this will be handled by a separate pay item, although normal leave pay items may have been used in the past with accruals manually adjusted. There are a number of other considerations under STP2 and we've put together a guide on this topic.

11. An employee is taking normal annual leave, is this to be categorised as Other?

Yes, 'Other' is the reporting category attributable to paid leave that is taken.

12. An employee is taking leave without pay, does that need to be reported?

No, leave without pay is not reported. Generally if something wasn’t reported previously it is not reported under STP2 at inception. Similarly, public holidays are not reported as leave.

13. We provide leave loading on annual leave to account for the loss in opportunity for overtime, how do we process this so it is reported as overtime?

You would configure a ‘Loading’ pay item and use a negative rate. For example, if you were paying 17.5% leave loading then you would use -82.5 (that is 17.5 – 100). You would also need to add another leave pay item without leave loading (or remove the leave loading from your current pay item).

14. Bonuses are now separately reportable, as is overtime, so if a bonus is paid in recognition of overtime, is it reported as a bonus or overtime?

Generally, if a reportable item is directly related to overtime then it is reported as overtime. This includes things such as the component of annualized salaries that is directly attributable to overtime, travel allowances outside of ordinary hours and annual leave loading tied to loss of overtime.

15. Some employees utilise salary sacrifice to gain exempt benefits such as portable electronic devices, how is this reported under STP2?

Previously these arrangements were indirectly reported through a reduction in gross earnings (assuming gross was the source of the salary sacrifice). The salary sacrifice itself was not reported, nor was the exempt benefit. Under STP2 salary sacrifice needs to be reported and the source of the sacrifice needs to be grossed back up to its pre-sacrifice level. The exempt benefit is still not reported. This is an important change in processing and reporting under STP2, and there is a need to configure pay items and salary sacrifice items to support these arrangements. A similar approach is required if salary sacrificing to reportable fringe benefits which is common in salary packaging arrangements. If such arrangements are spanning STP1 and STP2 reporting it is important to make the relevant changes after STP1 reporting has been completed and prior to reporting under STP2 unless version 22.20 is in use in which case the system will handle the reporting under STP1 and STP2 seamlessly, once the new pay items are configured. View the Sybiz Visipay STP2 guide on this topic.

16. How differently are allowances handled under STP2?

There are three new types of allowances being Qualification & Certification, Tasks and Tools. These would have previously been listed as other under STP1 and if you provide these allowances you will need to change them from Other to the new specific categories. It would pay to review all allowances as there may have been some reclassification required.

Additionally, the way Other allowances are reported has also changed in that a code is transmitted in the STP2 report, rather than the description which was previously used. All Other allowances will need to be edited and a code selected for use with STP2.

17. How is Employment Basis changing?

The employment basis of an employee needs to be classified for STP2. Logic is used upon upgrade to set this value for employees to Casual if they are linked to a staff type that is flagged as casual, Full Time if they are linked to a staff type with a working week of at least 35 hours and Part Time for all others. Note that other options such as Death Beneficiary are available and must be manually selected if relevant. The Non-Employee option (such as contractors etc.) will not be supported in Sybiz Visipay 22.20 and will be reverted via the same logic as other employees on upgrade to this version. For clarification on setting the correct employment basis, please consult with the ATO or your trusted business advisor.

18. I need to add new leave types, how do I go about that?

New leave types need to be added in Lookups > Leaves. Once they have been added there they can be added to Staff Types and Earning Pay Items can be configured for the new types of leave that you have created.

Glossary

There is a fair amount of terminology associated with STP. This list will clarify terms - some familiar, some new - relevant to Single Touch Payroll Phase 2.

Allowance Categories – An extension to the data required to be captured in relation to allowances. These categories are based on the work related deduction categories in individual tax returns

ATO – Australian Taxation Office

Disaggregation of Gross - Breaking down income to include bonuses, commissions, paid leave, overtime and more

STP – Single Touch Payroll

STP2 – Single Touch Payroll Phase 2

STP Deferrals – An extension for businesses or software vendors from meeting STP requirements as of 1 January 2022

Sybiz Employer Portal – A third party web service that is an essential component in STP reporting. Sybiz Visipay sends data to the Sybiz Employer Portal which is then packaged in the specfic format required by the ATO