STP Phase 2 will require employers to report additional payroll information to the ATO, including superannuation contributions, salary sacrifice contributions, and total payments to employees. This information will be used by the ATO to pre-populate tax returns and improve the accuracy of data for employers and employees.

Clients who are currently using online Payroll systems such as Xero Payroll will have until 31 March 2023 to make the transition to STP Phase 2. To make the transition, clients will need to perform the following steps:

1. Verify their payroll data: Clients should ensure that their Xero payroll data is accurate and up to date. This includes verifying employee information, pay rates, and payroll settings.

2. Enable STP Phase 2: Clients will need to enable STP Phase 2 in their accounting software. This can be done by navigating the payroll settings and selecting the STP Phase 2 option.

3. Report payroll information: Clients will need to report their payroll information to the ATO through Xero Payroll. This will include superannuation contributions, salary sacrifice contributions, and total payments to employees.

4. Review reports: Clients should regularly review their STP reports in Xero to ensure that the information being reported is accurate. This will help to avoid any errors or discrepancies that could result in penalties or fines.

If you are a Xero client, please see the below link which will give you a step-by-step guide on updating your business STP2 details:

Move to Single Touch Payroll Phase 2

Should you require assistance regarding your business’s transition to STP Phase 2, please do not hesitate to contact your BBB Advisor to discuss and ensure you meet the compliance requirements of the ATO.