Single Touch Payroll Phase 2 Advisory Group key messages 8 July 2021
Welcome and introduction
Chair Dana Fleming welcomed members and noted that Emma Rosenzweig would be joining as the Chair for future meetings.
No new conflicts of interest were declared or noted for this meeting. ATO is undergoing a review of how it manages conflicts of interests for committees and working groups. A new proforma will be issued to members post meeting with information about the process.
Members shared the following insights:
- A soft approach to introduce the employer guide is recommended, until software solutions and features are available. Members noted a firmer approach is helpful to encourage compliance and ensure they are doing the right thing when the capability is in place.
- More work needs to be done on transitioning to Phase 2 and a clarity is required on what information will need to be provided by digital service providers (DSPs) as opposed to ATO. Industry members were also keen to understand the ATO’s position with regards to low cost/no cost solutions and feature set for Phase 2.
- Engagement has commenced between ATO and Fair Work Commission who will need to be involved in the education process to support employers with their obligations.
- Further education is required, and information needs to be simplified for small businesses where English is their second language. Connected messaging between government agencies is important to achieve the right messaging for end users.
- ATO can assist DSPs and industry with staggered messaging and interactive webinars to support communication/education of their clients.
- Concerns were raised about the disaggregation methodology and how taxable income is going to be derived through that disaggregation. Businesses are nervous about reporting wages correctly with consideration to wage under/overpayments reported in their income tax return.
- Fair Work Commission and Services Australia could be involved in ATO educational webinars to support employers with understanding correct payments, reporting and obligations.
Phase 2 update
On 24 May 2021 the ATO received the first STP Phase 2 report successfully moving it through to Services Australia.
Four DSPs have been whitelisted and commenced reporting covering approximately 2,500 employers and 22,000 individuals.
There are 98 products registered to commence external vendor testing environment. Thirty three DSPs have registered for external conformance testing, 22 are actively testing and four DSPs have been whitelisted.
DSPs are self-identifying anomalies through our testing programs.
As an extra layer of assurance, ATO has commenced quality tests for submissions in production to ensure the data coming through is as expected and aligns with predicted pattern submissions.
The deferral application process will open for DSPs from July.
The group were pleased with the numbers of DSPs who have commenced testing or reporting and will look to share good news story of early adopters.
Phase 2 employer guide
The employer guide will be published on 25 June 2021. Subsequent communications will then be deferred until after the first two weeks of tax time.
Feedback on the guide from STP committees and working groups has largely been positive. Further consultation is planned to understand the next level/additional guidance required for employers transitioning to Phase 2.
Industry suggested some of the next areas to focus on include:
- Small business, industry, and award specific guidance.
- A general checklist would be helpful.
- What employers can do now in preparation to report complex pre and post salary sacrifice information.
- It was noted that small businesses would only be interested with how STP Phase 2 affects them and the software they use; and should not be overwhelmed with other information.
Phase 2 employer engagement
The proposed webinar series has been supported by DSP Phase 2 Transition Group. An expression of interest will circulate to members out of session to gauge interest in joining future webinar series.
It was noted that industry led campaigns with the ATO would be helpful to tailor and support for small business industry segments.
Members supported the approach to commence with a simplified webinar and then follow up with a more complex webinar. Employers can then choose which webinar would most suit their needs.
It was noted that if something is incorrectly mapped or reported through STP Phase 2 it may need to be resolved with a conversation between the employee and the employer.
There is a need to get the narrative right and understand downstream impacts if reporting is not done right. That is, what is the benefit for STP Phase 2 for me.
Industry members asked if the webinars could be added to ATO’s YouTube page to make it more accessible for DSPs.
In addition to the webinars scheduled for September, industry feedback was that additional webinars should be undertaken in December just prior to the 1 January 2022 start date or defer the start date to March.
No other business was discussed.
Summary of key topics discussed at the Single Touch Payroll Phase 2 Advisory Group meeting 8 July 2021.