Is your business compliant and ready for Single Touch Payroll Phase 2?

What is Single Touch Payroll Phase 2?

In the 2019–20 Budget, the government announced that Single Touch Payroll (STP) would be expanded to include additional information. 

The expansion of STP, also known as STP Phase 2, will reduce reporting burden for employers who need to report information about their employees to multiple government agencies. It will also help Services Australia’s customers, who may be your employees, get the right payment at the right time.

The mandatory start date for Phase 2 reporting was 1 January 2022. 

Flexible approach to transition

To support you, our approach to STP Phase 2 will be flexible, reasonable and pragmatic based on your business readiness and individual circumstances. 

Digital service providers (DSPs) who need more time to make the changes and update their solutions to support STP 2 can apply for a deferral for their customers. If your DSP has a deferral, they will let you know. 

If you can start reporting by your DSP’s deferral date, you don’t need to apply for more time. 

What are the main changes in STP Phase 2?

STP Phase 2 introduces changes that reduce reporting requirements across the following four areas. 

  1. Tax File Number Declarations

Information collected from TFN declarations – including the TFN itself, employment type and whether the employee has a HECS-HELP debt — is to be included in STP reports and the declaration itself will no longer need to be sent to the ATO. 

  1. Employee Separation Certificates

These certificates are no longer required, as the reason why an employee has left the business will now be provided via STP reports. 

  1. Lump Sum E payments

Previously, if an employer makes a payment owing from previous years a Lump Sum E letter would need to be provided to the employee. This information must now be included in Phase 2 reporting, with details of the payment appearing in the employee’s income statement.

 Child Support

Businesses will have the option to include child support garnishees and deductions in their STP report, reducing the need to provide separate advice to the Child Support Registrar. (Please note: this option is not yet available in MYOB products.)


 If you need more time

  • You can apply for more time past your DSP’s deferral if you need more time to transition. Your registered agent can also apply on your behalf. See STP expansion (Phase 2) delayed transitions.
  • There won’t be penalties for genuine mistakes for the first year of Phase 2 reporting until 31 December 2022. This includes employers who have already started Phase 2 reporting. 

To know more about the requirements and the benefits please head to


Here at JH & Co most of our clients use Xero and MYOB, so we have included some additional information. However, we are always more than happy to assist you with any questions that you may have regarding Single Touch Payroll, as well as any accounting queries. 

If you would like to know more about how Xero and MYOB are rolling out STP, we have included links to their sites. 

Please be aware that MYOB has obtained a deferral from the ATO which means you have until 1 January 2023 to move to STP Phase 2. This means you can relax and make the move at a time that suits you in 2022.






We are here to support you

If you have any questions or concerns about this or any other changes impacting your business, get in touch.

Call us on 5831 1466 or email admin@jhco.com.au and we’ll organise a time for a confidential chat.