Single Touch Payroll - Phase 2

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What is Single Touch Payroll Phase 2?

When Single Touch Payroll (STP) was introduced in July 2018 it changed the way you sent your payroll information to ATO. The ATO is now expanding the STP to Phase 2 which becomes mandatory from 2022.


The main purpose of this new rollout is to continue to reduce administrative burden for employers and help employees get the right payment at the right time.

How is STP Phase 2 different from Phase 1?

What is changing?

To support the new reporting requirements under STP Phase 2, your STP solution will need additional configuration to support Phase 2 reporting. To be STP2 compliant, your payroll software will require additional information around:

  • Employees
  • Payment items
  • Deductions
  • Salary Sacrifice
  • Child Support Payments

What stays the same?

The purpose of STP is to automate information, where your STP enabled payroll solution sends payment, tax and super information directly to the ATO. The following process and information shared will not change:

  • How and when you lodge your STP reports

  • End of year finalisation requirements

  • Your tax and super obligations

  • The due date of your reports

The benefits of Phase 2

The aim of the new phase is to streamline employer interactions with multiple government agencies and improve the employee government payments. The benefits of Phase 2 include:

  • No longer lodging electronic tax declarations

  • Issuing of Separation Certificates

  • Reduced interactions with Centrelink & Services Australia

  • Earlier notification of possible payment issues 

What does this mean for me?


The Employer


The streamlining of information in the updated STP Phase 2 will reduce stress on your finance team. You will see the reduction of admin overheads as well as quicker feedback from ATO on errors.


The Payroll administrator


Depending on your organisation size and resource availability, it’s best to get prepared when it’s convenience for your team. Start planning the best time to transition by staying informed about the requirements. Be sure to download a copy of the Employer Reporting Guidelines to learn more

employees (1)

The Employee


After the transition to Phase 2 by all organisations, the employees will benefit from having more accurate and transparent information streamlined to one source. This means employees will less likely have a debt with the ATO or Centrelink as their income is reported live. They will also have quicker processing with Centrelink items.

What can your business do to prepare?

The expectation from ATO is that all businesses need to have their payroll information to meet the new requirements including employee details and reporting categories in 2022.

However, the ATO has a flexible and reasonable approach to this transition and is willing to support businesses based on their readiness and individual circumstances.

Complete our quiz to test your readiness to transition to STP Phase 2 now.

How is ReadyTech preparing employers?

As an established Payroll Services Provider with over 30 years experience across Australia and New Zealand, the ReadyTech team is equipped and ready with all the information about STP Phase 2 to guide our customers through the transition.


Our solution is being updated to support the STP Phase 2 reporting requirements, and we are working closely with our clients to help determine their readiness to transition. We are also hosting a series of webinars to keep everyone informed.


We have negotiated traditional deferrals for our clients with the ATO.

Have questions and want to learn more?

FREE 1 hour webinar featuring ATO and a ReadyTech expert covering:

  • Why STP Phase 2 is important
  • The benefits for employer and employee
  • Key differences from phase 1
  • Preparation tips and resources
  • Q&A direct with ATO representative

How will Single-Touch-Payroll Phase 2 affect your organisation? 

The what, why and how you can prepare for STP in 2022. The ReadyTech webinar was hosted by Paul Orford, our Product Compliance Manager and joined by special guest Acting Director of Single Touch Payroll from the ATO.