Single Touch Payroll Phase 2 Advisory Group key messages 11 April 2023

Welcome and introductions

The chair opened the meeting with an acknowledgement of country and welcomed members.

No conflicts of interest declared.

Key messages from the 27 February 2023 were endorsed.

DPS communications

The ATO tabled a paper on Digital service provider (DSP) employer transition, engagement, and communications noting:

• DSP readiness and Go Live Support DSPs product readiness is progressing well with 279 whitelisted products (86% of 324 expected to build STP Phase 2) and 34 products currently in extended conformance testing.
• Single touch payroll (STP) Phase 2 has been a bigger change for some more than others, determined by many factors including the level of customising across some products and the level of support required for their customers.
• We have seen many products transition to retirement of legacy products which has been a signification challenge to transition to Phase 2 with some products having to rebuild functionality and displays.
• The DSP assurance program will continue for new products and new functionality, as well as to identify and engage with DPSs on conformance issues and where outliers are identified.
• The survey for DSPs on the no cost and low-cost register closed on Friday 24 March, which gave them an opportunity to provide input into the continuation of the register, as well as the current requirements. We are reviewing the feedback, including commentary from the previous meetings, and will assess options.
• We acknowledge the price point and maintenance of the register are key points of contention and ensure that any changes are communicated.

Employer transition and engagement

• There are over 679,000 (78%) of employers reporting in Phase 2 data for 10.3 million employees.
• We are seeing a substantial number of employers onboarding daily. It is expected most employers will transition to Phase 2 reporting by 31 July 2023.
• The outbound correspondence campaign that commenced in March 2023 has finished. The campaign consisted of a variety of reminders and nudges sent to employers, with stronger wording introduced. A similar campaign will be repeated during May and June 2023.
• The final tax and BAS agent client list have been rescheduled from April to August. This change will ensure the accuracy of the lists, given the rapid rate of onboarding.
• We continue with our one-to-one engagements with Top 100 employers, focussing on those with deferrals expiring in April, May, and June 2023. Most appear to be on track, with only a minority applying for further deferrals or requiring our support.

A big thank you to the STP Advisory Group including the STP Employer Transition Working Group for all your support and partnership over the last few years making the delivery STP Phase 2 successful.

A summary of the groups achievements and contributions were highlighted including:

• comprehensive suite of guidance materials
• business implementation guide
• Thirteen topic-based videos and webinar recordings including practical advice for employers
• 108 external speaking events for over 34,400 attendees
• over 100 Newsroom articles published
• client lists sent 3 times to 32,000 tax and BAS agents.

STP Employment Transition Working Group

The STP Employer Transition Working Group will be closing. The group has helped shaped the letters, communications, and webinars. Thank you to everyone involved.

Services Australia

An update was provided on the progress of the employment separation certificates including the pathways on how Services Australia will request an employment separation certificate noting:

• Employment separation certificates may be requested for customers currently on payment or to support new claims.
• Employers are still required to provide an employment separation certificate if they receive a request from their employees or a Services Australia staff member.
• Services Australia has already reduced thousands of employment separation certificate requests for current customers. It is anticipated that this will grow as more employers transition to STP Phase 2 and process enhancements are implemented.
• Further work is underway to streamline the employment separation certificates process for more customers.
• A pilot was undertaken in December 2022, to see what scenarios and what STP data can be used, and what additional information is required, to reduce the need for employment separation certificates with new claims.
• Outcomes of the pilot showed several areas where the current STP data is not sufficient to be able to correctly pay a customer.
• Services Australia have been working with the policy owners the Department Social Services to ensure that the policy settings for Social Security supports the increased use of STP data.
• Once finalised, it will enable Services Australia to ensure that the technology built supports the Social Security policy and reduces the volumes of employment separation certificates for new claims, including what further enhancements can be made overtime.

Member comments

• Members encouraged Services Australia to engage and consult with DSPs even at the policy design stage.
• Member interest on the reasons for termination that get reported through STP Phase 2, as it is difficult to get information for people that have been terminated in prior years.
• Industry expressed the need for clear guidance around what reporting elements in STP impact different government benefits that Services Australia administer, through the lens of the employer. It was suggested this could also be published on ato.gov.au

Industry scan

Members insights on what’s new and different in their environments included:

• The ATO noted (in response to a comment from member) a Legislative Instrument on Withholding Payer Numbers (WPN) holders is out for public consultation for 2 weeks which looks to extend the exemption of WPN holders. Post consultation, the ATO will communicate any changes more broadly.
• There are still some issues around allowances and assisting employers get it right.
• The ATO have introduced new content in the employer guidance and allowances which also includes a decision tree.
• Some BAS agents are reporting the client agent linking is causing some issue with getting STP reports filed.
• There are concerns in remote areas and for micro small businesses that they are going to disengage from STP.
• STP pay reports – hearing from some large clients that they may need to spend a few days on refining what they report to the ATO is accurate.
• The ATO confirmed what is paid on payday is what should be reported in STP. The Corrections Framework is there if there has been a mistake in someone’s pay or an adjustment or misclassification is required.
• Group concern around where employment/employers type issues get raised and discussed across government and industry is a challenge.
• The Chair confirmed the ATO and the STPAG does not operate as a voice for whole of government engagement with payroll providers.

STP Advisory Group closure

The Chair confirmed it is the last meeting for the STP Advisory Group. It has reached a natural closure point as the STP program, project has come to an end. Members reiterated previously raised concerns about closing the group and expressed a strong view that there remains a need for a channel for employer obligations to be discussed strategically with the ATO.

The Chair noted those concerns but highlighted the current Consultation group framework that the ATO operates, with the opportunity for time limited special purpose groups as required.

The Chair thanked the group for their time, effort and valuable contribution to the group over the last few years on the successful implementation STP Phase 2.

The ATO would also like to extend our sincere thanks to your teams and your organisations.

Key topics discussed at the Single Touch Payroll Phase 2 Advisory Group meeting 11 April 2023.