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  • Single Touch Payroll Phase 2 Advisory Group key messages 7 November 2022

    Key topics discussed at the Single Touch Payroll Phase 2 Advisory Group meeting 7 November 2022.

    On this page

    Welcome and introductions

    The chair opened the meeting and welcomed members and guests

    No conflict of interest declared.

    Withholding payer numbers

    There are approximately 4,500 Withholding Payer Numbers (WPNs) who have evidence of active employment.

    Since start of Single Touch Payroll (STP), the WPNs holders are exempt from STP reporting. They are still covered by a current exemption until June 2023.

    We are in the process of doing some investigative work to understand this segment and working through what the next steps are.

    Use of STP data

    Services Australia provided an overview and key insights of the progress made in the use of STP Phase 2 data to improve their customer experience.

    The group discussed options for continuing to raise the profile of the how STP data is used by Services Australia and the benefits it provides. Services Australia will continue to engage regularly with the STP Phase 2 Advisory Group.

    Digital service provider readiness and assurance

    The ATO tabled a paper on Digital Service Provider (DSP) readiness and assurance noting:

    • Overall product readiness is positive and progressing well.
    • Extended Conformance Testing and initial production data testing – Currently there are around 75% products that have been whitelisted for STP 2. We anticipate over 80% of products will be whitelisted by the end of the calendar year.
    • The vast majority are well engaged, progressing their testing, and are covered by DSP deferrals. We are narrowing our focus on DSPs that do not appear to be on track, including those that are working through complexities.
    • There is a small number of existing STP Phase 1 products not being developed for phase. We are working with the DSP directly to ensure their customers are supported and ensure processes are in place, for example, for prior year amendments.
    • With an increasing number of products with initial production data, we are continuing to work with DSPs through our Go-Live Support on transition issues and other issues identified to improve customer experience, including strategies to influence complete and correct reporting.
    • We are preparing an industry update on common Standard Business Reporting (SBR) errors in STP Phase 2 and working with DSPs on ways that we can prevent or minimise the issues from occurring.
    • We are seeing a decline in DSP deferral extension requested due to DSPs generally remaining on track with delivery schedules and continually progressing product readiness.

    Employer transition engagement and communications

    ATO tabled a paper on employer transition engagement and communication noting:

    • 259,000 employers now reporting Phase 2 data for just under 5 million individuals.
    • The last correspondence campaign for 2022 is now issuing (similar to the previous campaign in August). We are sending tailored correspondence to selected employers. The correspondence will be based on product readiness and sent to employers
      • whose product is ready and are not covered by a deferral
      • whose product is ready and are still covered by a deferral (nudge)
      • whose product is not being updated to offer phase 2 reporting.
    • We have also reached out to the top 100 employer population, with those large employers whose product is whitelisted, and deferral is about to expire. These engagements are providing us with confidence that many of the top 100 employers are preparing to transition before 31 December 2022, with several others in early 2023.
    • There have been several events as we approach the end of the year that include a bookkeeper network session, a top 15 DSP webinar and a number of conferences with major payroll associations.
    • The next client lists have started issuing to tax and BAS agents. The list outlines all employer clients and their STP reporting status.

    Industry insight and comments:

    • Seeing some interesting behaviour taking place around employers transitioning – Despite releasing STP 2 features in trances or batches, feedback from employers is that they will wait until all the pieces are there before they make the transition to STP Phase 2.
    • Hearing similar feedback from agents and intermediaries – That their customers have a longer deferral, so they are prioritising and bringing their customers onto other products.
    • Correspondence feedback – There is a need to ramp up nudge messaging. The ATO will investigate firmer nudge messaging in the new year.

    Consultative group update

    The STP Employer Transition Working Group (STPETWG) also raised the need for stronger nudge messaging.

    The group will consult on ideas and communications for stronger messaging and report back to the group in the new year.

    ATO will also invite Services Australia to be part of the STPETWG.

    Industry scan

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

    • Some members recently meet with Treasury around Your Future, Your Super (YFYS). Members noted industry previously provided feedback on the problems with YFYS before it was implemented as it is not fit for purpose.
    • ATO noted, the YFYS review is being undertaken by Treasury for Government. Treasury are seeking feedback on the review and are gathering feedback on the comparison tool and the stapling service.
    • The ATO will also be releasing Application Programming Interfaces for the wholesale service for the stapling in December, which will then be open to service providers to offer a wholesale service to stapling.
    • Seen a notice about the decommissioning the State Super Fund bulk request process. It was suggested that YFYS be discussed again to resolve the current issues as it still not fit for purpose. The problem in establishing the employer employee relationship.
    • There is still some confusion around director ID, myGov and myGovID and why it's required.
    • Concern around the progress of the Fair Work Commissions mapping of allowance codes.
    • Seeing a number of quires coming through on what gets reported when someone’s on leave and how you report this through STP. There are also similar issues with reporting overtime through STP.
    • There are some concerns that there will be no ATO communications issued in December and January period as there may be some deferrals finishing. There may be some panic from agents on what to do now. The ATO confirmed communications will be picked up from February 2023.
    • STP Phase 2 data reported for the last quarter of the year – Industry noted there may be some (data anomalies) reported during the December January period. ATO will provide feedback and flag with Services Australia.
    • The Tax Practitioners Stewardship Group (TPSG) is doing good work around what the future deferrals system might look like for agents. As the ATO looks at any new deferrals next year, it was suggested to also look at the TPSG work on lodgment deferrals.
      Last modified: 13 Dec 2022QC 71078