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  • Single Touch Payroll Phase 2 Advisory Group key messages 13 December 2022

    Key topics discussed at the Single Touch Payroll Phase 2 Advisory Group meeting 13 December 2022.

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    Welcome and introductions

    The chair opened the meeting and welcomed new member Craig Frost from Services Australia.

    No conflict of interest declared.

    Update on action items from 7 November meeting

    • Software Service ID (SSID) issues occurring – members noted there have been no further SSID issues raised. Members were encouraged to email any new SSID issues to

    Action item was closed.

    • News article for ATO newsletters – the ATO is working with Services Australia on an information pack which will be distributed to the group in the new year.

    Action item was closed.

    DSP employer transition, engagement and communications

    The ATO tabled a paper on Digital Service Provider (DSP) employer transition, engagement, and communications including a draft correspondence plan. It was noted overall DSP product readiness is progressing well, with 257 whitelisted products.

    The current focus for the ATO includes:

    • supporting the remaining DSPs with their product readiness, including extended conformance testing
    • initial production data testing, to identify and remediate Single Touch Payroll (STP) Phase 2 transition and common errors
    • managing the DSP deferrals, including time for customer transition
    • production assurances, with a particular focus on Standard Business Reporting errors. We are preparing an industry update in addition to separate DSP discussions.

    The go-live support team continue to educate and support DSPs and their clients to resolve the most common production issues and others identified through our review process.

    Employer transition and engagement

    Over 300,000 employers are now reporting STP Phase 2 data for just under 6.5 million individuals. The ATO is seeing steady growth in employers on board each week.

    We are continuing to engage with Australia’s largest employer and have seen a good number transition in November.

    In February 2023, we will commence our direct employer correspondence which will focus on firmer messaging for those employers who have a product ready and are no longer covered by a deferral. Correspondence will be shared with the group in the new year.

    The tax and BAS agent client lists commenced issuing from 1 November 2022.

    We are currently piloting a joint messaging approach with DSPs. We are testing whether a DSP sharing a message from the ATO will create any additional urgency to prompt those employers to start STP Phase 2 reporting. If this proves effective, we will look to leverage this type of communication in 2023.

    STP Employment Transition Working Group

    The STP Employer Transition Working Group met in early December and were broadly supportive of our correspondence approach in early 2023 for firmer messaging.

    Industry Scan

    Member insights on what’s new and different in their environments:

    • Members discussed the most effective time to issue the updated client lists. The ATO noted that the timing can be considered, however the clients' lists will not be issued in February.
    • The current focus for the DSP industry is paid family and domestic violence leave and what needs to be built into software to support this. It was highlighted there will be messages from DSPs in January and February that will not focus on STP Phase 2 and will focus on paid family and domestic violence leave.
    • Paid domestic violence leave measure – the ATO is working with the Department of Education and Workplace Relations (DEWR) who are the lead on this measure. A cross agency working group has been established which includes Fair Work. The ATO are waiting on final guidance from DEWR and Fair Work and will update STP Phase 2 guidance as soon as possible.
    • There continues to be a challenge to move some clients to STP Phase 2. Members agreed that until clients start receiving nudge messaging or messages that there could be some penalties applied, some will not do anything.
    • There are a small number of employers that have not commenced STP reporting at all. The ATO is considering the penalty strategy for 2023.
    • Intermediaries would like advance warning from the ATO before penalty letters are issued for STP Phase 2.
    • We are seeing several questions from clients around
      • refunds of salary sacrifice and how to report it
      • paid domestic violence leave and how to report this in STP Phase 2.
    • There is still some confusion around the child support STP file and when it is submitted to Services Australia, on a particular day that child support was not expecting the file. Services Australia will explore if this is still an ongoing issue.
    • Ongoing concerns around the progress of separation certificates.
      Last modified: 13 Feb 2023QC 71320