ATO support for employers with expansion of STP
As part of the expansion of Single Touch Payroll (known as STP Phase 2), from 1 January 2022, employers will need to report additional payroll information in their STP reports including:
disaggregation of gross amounts (including separate reporting of paid leave, allowances, overtime, directors’ fees and salary sacrifice amounts);
employment and taxation conditions (including information from the TFN declaration); and
income types (for example, salary and wages, working holiday maker income, foreign employment income).
To support employers with the move to STP Phase 2 reporting, the ATO will take the following approach:
Employers that can start Phase 2 reporting by their digital service provider’s deferral date (if applicable), do not need to apply to the ATO for more time.
If an employer’s software will be ready for 1 January 2022 and they are able to start reporting before 1 March 2022, they do not need to apply to the ATO for more time (that is, an automatic extension applies).
The ATO has also advised that penalties will not be applied for genuine mistakes in the first year of Phase 2 reporting until 31 December 2022.
Preparing for the new Director ID regime
As part of its Digital Business Plan, the Government announced the full implementation of the 'Modernising Business Registers' program.
This included recently enacted legislation introducing the new director identification number ('director ID') regime.
The director ID is a unique identifier that a director will need to apply for once and will keep forever.
The introduction of director IDs is intended to create a fairer business environment by helping prevent the use of false and fraudulent director identities, which "will go a long way to better identifying and eliminating director involvement in unlawful activity".
Note that all directors will need to apply for a director ID, including directors of corporate trustees of self-managed super funds ('SMSFs') and of family trusts.
Individuals will be able to apply for a director ID from 1 November 2021 on the new Australian Business Registry Services ('ABRS') website (at abrs.gov.au) and will need to log in using the myGovID app (set to a 'Standard' or 'Strong' identity strength).
When an individual must apply for a director ID depends on the date they became a director. For directors under the Corporations Act:
who became a director on or before 31 October 2021, they must apply for a director ID by 30 November 2022;
who become a director between 1 November 2021 and 4 April 2022, they must apply for a director ID within 28 days of appointment; and
who become a director from 5 April 2022, they must apply for a director ID before their appointment.
Individuals will need to apply for their director ID themselves to verify their identity (i.e., no one can apply for it on their behalf, including agents).
Super is now following new employees
The ATO is reminding employers that, as of 1 November 2021, there is an extra step they may need to take to comply with the choice of super fund rules.
If a new employee does not choose a super fund, most employers will need to request the employee's 'stapled super fund' details from the ATO to avoid penalties.
A stapled super fund is an existing super account which is linked, or 'stapled', to an individual employee so that it follows them as they change jobs.
When a new employee starts, employers need to:
offer eligible employees a choice of super fund;
if the new employee does not choose a super fund, the employer will need to request stapled super fund details using Online services for business; and
pay super contributions into one of the following:
– the super fund they choose;
– the stapled super fund the ATO provides if they have not chosen a fund; or
– the employer's default fund (or another fund that meets the choice of fund rules) if the
employer cannot pay into the two above.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
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