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  • Single Touch Payroll Employer Transition Working Group key messages 21 September 2021

    Welcome

    The Chair provided an acknowledgement of country and thanked everyone for making time to attend the meeting.

    The Chair advised of a deviation from the agenda due to guest speaker Michael Karavas acting Assistant Commissioner, Superannuation and Employer Obligations, providing an update.

    Project update

    Michael Karavas acting Assistant Commissioner, Superannuation and Employer Obligations, provided an update of the ATO single touch payroll (STP) Phase 2 project including an overview of the digital service providers (DSP).

    • The ATO is aware of the messages in the market and from industry, around concerns with the 1 January start date for Phase 2 and acknowledged that January was a challenging time of year for many small businesses, including the impacts of COVID-19 lockdowns.
    • The ATO will be taking a pragmatic approach to the 1 January 22 start date, helping employers to transition, and encouraging them to start reporting by 1 January 2022 where they can.
    • Where an employer needs more time to transition to STP Phase 2, they can apply for a delayed transition by using our online deferral tool however, if an employer can start by 1 March 2022 they will be considered to have started on time. This will allow employers to avoid a Christmas transition and will be automatically applied to all employers.
    • The ATO wants to provide some additional comfort around the new reporting requirements. As such, there will be no penalties for genuine mistakes during the first 12 months of the Phase 2 transition, until the end of December 2022.
    • The ATO have received some Phase 2 reports and this data is being shared with Services Australia.
    • The ATO have received deferral applications for about one third of DSPs which are currently being assessed.

    A member asked if agents would be able to find out when DSPs were whitelisted or had a deferral?

    ATO confirmed that when a DSP is whitelisted, they will go on the product registerExternal Link available on the ATO’s software developers’ site. The ATO will not be publishing a list of DSP deferrals. DSPs need to communicate their deferrals and plans with clients.

    Digital service provider readiness

    The ATO provided update and statistics on the DSP readiness and testing, noting the following:

    • Since the DSP webinar in October 2021, there has been an increase in DSPs moving into testing.
    • There were also 640 employers reporting STP Phase 2 information covering 8,500 employees.
    • We are expecting some peak testing periods with DSPs coming through soon to be ready for 1 January 2022, as well as a peak in April–May with DSPs who were planning to be ready for 1 July.
    • It was highlighted that the timing of employer deferrals would be early December, this would allow a little more time for DSPs to make their plans known to their customers before employers considered getting their own deferral.

    Outbound correspondence

    The Chair provided an overview of the outbound correspondence plans for Phase 2 including a ‘repeatable process’ based off a DSP’s product readiness, to ensure an employer is getting the right message at the right time.

    The Chair noted the draft correspondence will be sent to the to the group shortly.

    ATO will be sending correspondence to employers in November 2021 whereby DPS's

    • would be ready for 1 Jan 2022 or
    • had a deferral that expires before 1 May 2022.

    Members feedback around the outbound correspondence included:

    • appreciation of the messaging around getting support from tax professionals
    • recommendation that the ATO should be including the delayed transition message across all letters regardless of timeframes.

    Transition messaging

    An overview of the mid-year transition options for employers was provided, including feedback received from industry.

    The ATO are working on some additional options to support employers who may not have a full financial year of data. These additional options are to help employers’ transition who otherwise would be able to move to Phase 2 reporting if it were not for the fact, they cannot provide disaggregated information for periods prior to their transition.

    The options will ensure employers who want to or can transition do not have to wait until the beginning of a financial year to do so.

    Options are being tested with our consultative groups and then would be published as guidance in the Employer Guide.

    Group updates

    Victorian businesses are doing it tough with lockdowns and the ongoing COVID-19 impacts and employers are not focused on STP at all. The Chair reassured the group that all ATO messaging will be balanced to support those impacted by disasters of all kinds.

    Other business

    The group were reminded of the STP Phase 2 overview webinar on the 22 September 2021. When available, a link to the webinar recording will be sent to all members.

      Last modified: 16 Mar 2022QC 68159