With STP Phase 2, there are some changes made to reporting employee tax information to the ATO.
To access the employee Tax File Declaration section:
- Select Employees, then select the employee name from the home page.
- Select Tax File Declaration under Employee Settings.
Review employees' tax status
There will be 2 new sections at the bottom:
- STP tax category
- Medicare levy
Check these settings and ensure each employee has the relevant settings applied to them.
Audit invalid tax file numbers
If an employee has the option the employee quoted an invalid TFN, the corresponding TFN number that is entered in the Tax file number screen (987-654-321) will become invalid in STP Phase 2. This number will be updated to 000-000-000 so that it will be treated as if the employee didn't quote a TFN.
I've updated my employees' tax information, what's next?
Below are the changes that most businesses will need to make in preparation for STP Phase 2:
- Update pay category classifications
- Update leave category classifications
- Update deduction category classifications
If any of the following apply to your business, make these changes as well:
- If the business terminated an employee from 1st July 2021, provide a termination reason
- If any employee is closely held, under foreign employment, an inbound assignee to Australia, labour hire or other, update their income type in the employee's settings
- If you have working holiday maker employees, classify them correctly and state their country
- If you have employees working in another country, provide their country of work