XERO STP Phase 2: How to get set up and compliant

31 March 2023.
Our webinar aims to equip you with all you need to know to get set up and prepared ahead of the 31 March 2023 deadline.

Most Australian employers are familiar with Single Touch Payroll. STP Phase 2 is the next stop on this journey. Where phase one was a way of reporting employees’ tax and super to the ATO, STP Phase 2 expands the program to capture more detailed information. This will reduce the compliance burden for employers and individuals, and help the admin side of things for Services Australia.

Although you need to provide the ATO with more information, the way you submit STP reports won’t change; how much it differs from your current process will depend on the nuances of your unique business and employees. 

Stage one: The first stage was available within Xero from mid-April 2022 onwards. This included updates to the way new employee records are set up in payroll, ensuring STP Phase 2 compliance.

Stage two: The second stage will was rolled out within Xero mid-year. This will extend the set up process to enable the transition of existing employee payroll records to STP Phase 2 compliance. This will provide ample time for you to ensure all employees in your business are correctly set up for STP2 Phase 2 compliance.

Stage three: The final stage will be available in the second half of this year. It will see the new pay items from STP 2 finalised in Xero, with product support to review existing pay items that may need to be changed to those stipulated by STP Phase 2. 

Meanwhile, many of these new pay items are already available in Xero Payroll and will continue to be released over the coming months so you can start to use them ahead of the compliance date.

We will continue to let you know as these progress and make sure you have the information you need to transition as seamlessly as possible. This will include support in Xero, education webinars and guides to help you adjust to each stage.

Looking for more details? If you’d like to find out more about what STP Phase 2 will look like in Xero, Xero are also running webinars in February and March to guide you through the process. You can also take a look at this handy Xero guide to STP Phase 2, visit Xero Central, or refer to the ATO’s employer reporting guidelines. 

Keep an eye out for updates in Xero, as well as the STP Phase 2 Information Hub in Xero Payroll for the latest on how new additions and the rollout are tracking. We’ll make sure you’re across what’s happening throughout the transition.