Adjustments are coming about the way you handle payroll with Single Contact Payroll (STP) Part 2. We’ve been busy working within the background to get Xero Payroll up to date and prepared that can assist you transition forward of our compliance date later this yr. So when you’re questioning if you’ll have to make modifications (or have observed some updates in Xero already), right here’s the most recent on our STP Part 2 rollout. As at all times, we’ll proceed to be sure you have all the data and instruments you want to information you thru this course of.
Remind me – what’s STP Part 2 once more?
Most Australian employers are acquainted with Single Contact Payroll. STP Part 2 is the subsequent cease on this journey. The place section one was a method of reporting staff’ tax and tremendous to the ATO, STP Part 2 expands this system to seize extra detailed data. It will scale back the compliance burden for employers and people, and assist the admin aspect of issues for Companies Australia.
Though you want to present the ATO with extra data, the way in which you submit STP reviews gained’t change; how a lot it differs out of your present course of will rely upon the nuances of your distinctive enterprise and staff.
When will the modifications be rolled out in Xero?
We’ve got secured a deferral for all Xero Payroll customers till 31 December 2022, and we’re working carefully with the ATO to rollout the Part 2 modifications. That can assist you regulate to the shift and guarantee a easy transition inside Xero forward of the compliance date, we’ll be rolling these out in three phases over the yr.
When will every stage start?
Stage one: The primary stage will begin being out there inside Xero from mid-April onwards. It will embody updates to the way in which new worker data are arrange in payroll, guaranteeing STP Part 2 compliance.
Stage two: The second stage will start rolling out inside Xero mid-year. It will prolong the arrange course of to allow the transition of present worker payroll data to STP Part 2 compliance. It will present ample time so that you can guarantee all staff in your small business are appropriately arrange for STP2 Part 2 compliance.
Stage three: The ultimate stage might be out there within the second half of this yr. It should see the brand new pay gadgets from STP 2 finalised in Xero, with product help to evaluate present pay gadgets which will should be modified to these stipulated by STP Part 2.
In the meantime, many of those new pay gadgets are already out there in Xero Payroll and can proceed to be launched over the approaching months so you can begin to make use of them forward of the compliance date.
We are going to proceed to let you already know as these progress and be sure you have the data you want to transition as seamlessly as doable. It will embody help in Xero, training webinars and guides that can assist you regulate to every stage.
What updates have you ever already made?
You will have seen some new additions inside Xero already as we’ve been busy engaged on gadgets that can assist you change into STP Part 2 compliant. Whereas these will not be necessary but, they’re out there now so that you can begin preparing forward of the transition.
This contains new cost sorts that assist seize the extra detailed payroll data wanted for STP Part 2. These are:
- Bonuses and commissions: Beforehand they had been reported as a part of gross funds, however for STP Part 2 might be reported individually.
- Lump sum W (return to work) funds: A return to work quantity is paid to induce an worker to renew work – beforehand this was reported as a gross sum.
- Lump sum E funds: That is used if you make lump sum funds for again pay from prior revenue years and is now accomplished by way of STP as a substitute of a letter.
- Director’s charges: For those who pay administrators’ charges, it’s essential to individually embody these in your STP Part 2 report.
- New allowance sorts: Beneath STP Part 2 reporting, allowances for process, instruments or qualification should be reported underneath new labels.
On the subject of inputting worker data, you are actually additionally ready so as to add a termination purpose when one in every of your staff wraps up with the enterprise. This eliminates the necessity for an employment separation certificates to be issued.
Extra particulars on these modifications can be found within the STP Part 2 Info Hub by way of the Single Contact Payroll part of your Xero account, and we’ll proceed to share the standing of latest capabilities as they’re added.
What might be included in stage one of many rollout?
The primary stage of STP Part 2 updates might be going dwell in Xero from round April, with some tweaks to the way you onboard new staff. The Employment and Taxes tab in payroll worker setup may have a makeover and embody some new fields that can assist you on the journey to STP Part 2 compliance.
On the subject of including employment particulars, from April you’ll want to pick out whether or not a brand new staff member is an worker or contractor. You’ll additionally want to decide on their revenue sort, equivalent to wage and wages, carefully held payees (??together with relations of a household enterprise, administrators of an organization and shareholders or beneficiaries,) seasonal staff or working vacation makers, and add their employment foundation (full-time, part-time or informal).
For contractors, there’ll be the necessity to choose their revenue sort too – both:
- Non-employee, an impartial contractor, or;
- Labour rent, outsourced labour from a hiring company
On the subject of tax setup, there are some things that may look a bit of totally different. Tax scale is a brand new STP Part 2 requirement and you’ll have to choose between:
- Seniors & pensioners
That is to assist handle how a lot tax is withheld for PAYG. It will all be detailed in Xero because it goes dwell, to obviously information you thru the modifications.
Is there the rest on the way in which?
Sure – there are extra additions coming quickly that may seem in Xero over the subsequent few months. These embody cashed out depart and higher outlined paid depart gadgets, so that you’ll have loads of time to get acquainted with them earlier than the compliance deadline. We’ll replace the STP Part 2 web page in Xero because the additions go dwell and maintain you throughout on the right way to use them.
Do I have to do something proper now?
Simply take a while to get acquainted with the brand new pay gadgets and different additions which are out there inside Xero now. We’ll proceed to let you already know as modifications are rolled out and be sure you have all the pieces you want to get STP Part 2 prepared.
How can I discover extra data?
In search of extra particulars? For those who’d like to seek out out extra about what STP Part 2 will appear to be in Xero, we’ll be operating a sequence of webinars in February and March to information you thru the method. You can even check out this useful Xero information to STP Part 2, go to Xero Central, or discuss with the ATO’s employer reporting pointers.
Preserve a watch out for updates in Xero, in addition to the STP Part 2 Info Hub in Xero Payroll for the most recent on how new additions and the rollout are monitoring. We’ll be sure you’re throughout what’s taking place all through the transition.