Payroll body blasts STP deadline as ‘highly negligent’

The ATO released a legislative instrument putting in place the commencement date of STP Phase 2, and is currently open for public consultation until 14 January 2021.

But according to the head of The Association for Payroll Specialists (TAPS), Jason Low, said the proposal reflects the government’s overt ambition to improve the payroll management and employee benefits across Australia.

“Whilst a positive act, its severe deadline is highly negligent of the work needed to carry out a smooth transition, and is bound to cause a series of disasters to the payroll industry and Australian economy as a whole,” Mr Low said.

“Moving away from the payment summary categorisation of income, STP2 mandates employers to report data items each pay event by income type, including gross, allowances (tuple), overtime, paid leave (tuple), director fees, salary sacrifice (tuple), bonuses and commissions.

“These are further compounded by the added elements of Child Support deductions, parent period totals and employee YTD totals.”

Instead of July 2021, Mr Low said TAPS proposed a deferral of the mandatory start date to July 2022 at the earliest.

Mr Low said that, moving away from the payment summary categorisation of income, STP2 mandates employers to report data items each pay event by income type, including gross, allowances (tuple), overtime, paid leave (tuple), director fees, salary sacrifice (tuple), bonuses and commissions.

He said these are further compounded by the added elements of child support deductions, parent period totals and employee YTD totals.

According to Mr Low, adapting to all of this is no small task.

“Software developers will have to rely on the finalised specs, which ATO has yet to release, to write, trial and finalise the software functionality to reflect the new components before rolling it out to customers,” Mr Low said.

“Only once that’s done, can we begin educating employers on the new software and its impact on the way they manage payroll. The proposed deadline of July 1st 2021 means people are forced to spend the next six months rushing to get work done that would have otherwise taken 12 to 18 months to complete.”