Preparing for Single Touch Payroll Phase 2 – JCurve Solutions

Introduction

As the end of financial year draws closer, it's important that you begin your account preparation in order to transition to STP V2 from 1st of July 2022.

Note: Our blanket deferral covers you until 1st of September 2022. If you do not anticipate being ready to transition by this date you will need to apply for an individual extension for your business.

Data to review now

For the majority of Customers, if you are commencing STP from the start of the new tax year there should be very little that you will need to change in your account in order to transition smoothly.

Following are a list of action items that should be completed PRIOR to configuring/reporting via STP V2.

Note: The STP Branch Wizard should not be run until all pay runs/employees are finalised for the Tax Year Ending 2022. I.e You should not be turning this on prior to 1st of July 2022.

Whilst you are finalising the tax year end 2022, there is no issue with continuing to pay and report via STP V1 during July 2022 as long as transition and report via STP V2 by 31st of July 2022.

Please follow these steps to begin your STP V2 transition preparation:

Review Employee Data

Navigate to Payroll Administration> Payroll Records > Employees
Change the view to STP V2 Review.
Review the list of employees and confirm that they have the correct information set in line with the Employee Level Changes section of this guide: STP Phase 2 Changes. You can update employee fields where required and you may also want to export the employee list out to Excel or CSV if you have a high volume of data to review.

Review your Allowance Pay Component Sub Types

Navigate to Payroll Administration > Payroll Setup > Pay Component Sub Type.
Change the view to PAYROLL – Pay Component Sub Type
Set the PAY COMPONENT TYPE filter to Allowance
Click on Edit View
On the Results tab, insert fields from the drop box for STP Type Code and STP Allowance Other Type. Add to the search name STP V2 Allowance Review and click on Save As.

Review the sub type list and ensure that for any custom created allowance pay component sub types you set the STP Type Code. See this link for more information ATO Allowance Types. For any allowance that is of the type of Other Allowances (OD) you must also set the STP Allowance Other Type field to describe what the allowance is. You do not need to set either field for the Directors Fees sub type, this is a special code that should be left empty. NB - Any sub types that are part of the Infinet Cloud Payroll bundle should already have these fields pre-populated.

Review other Pay Component Sub Types

On the same report you can change the Filter from Allowance to ALL and now review your other sub types. If you have created your own pay component subtypes or made changes to our standard ones it is very important that you also review these sub types to ensure they are categorised correctly for STP V2 reporting purposes.

If you are using our standard subtypes then we have automatically updated them - you should NOT need to make changes in order to report correctly. Likewise when it comes to the Disaggregation of Gross if the Pay Component has been setup correctly then the breakdown of the reporting will be done for you automatically when you submit your STP report.

To follow is a table that summarises the fields you should be reviewing for each pay component sub type and the field Infinet Cloud is using for reporting to the ATO.

Pay Type	ICS STP Reporting Field to Review	Mandatory ICS STP Reporting Value	Additional Notes
Gross	Payment Summary Location	Gross Payments
Paid Leave	STP Type Code	Applicable code per Single Touch Payroll Phase 2 employer reporting guidelines
Allowances	STP Type Code	Applicable code per Single Touch Payroll Phase 2 employer reporting guidelines
Overtime	Pay Component Category	Over time
Bonuses	Pay Component Category	Bonus	NB Check the Bonus codes you use do not fit into any other category per this guide e.g Bonus for Overtime should have Over time as the Pay Component Category. Single Touch Payroll Phase 2 employer reporting guidelines
Commissions	Pay Component Category	Commission
directors fees	Script Constant	DIRECTORS_FEES	NB you must use the ICS sub typ code in order to have the script constant field set correctly
lump sum W (new code for return to work payment)	STP Type Code	Return to work payment (W)	NB this is a new code created in your account automatically so you should not need to change anything.
Salary Sacrifice	STP Type Code	super (salary sacrifice type S) – for super to a complying fund or retirement savings account (RSA) other employee benefits (salary sacrifice type O) – for benefits other than super.

Review Directors Fees

If you pay Directors Fees these must now be reported separately and paid using the Directors Fee Pay Component Sub Type that is part of the Infinet Cloud Payroll bundle. If you have previously paid these fees using a different code you can no longer do this as it will not report this information correctly.

Review any Employees with Manual PAYG pay components for downward withholding declarations

Navigate to Payroll Administration > Payroll Records> Employee Pay Components.
Change the view to PR-Classification Search.
Set the Pay Component Type to Tax.
For those employees that have a downward withholding fixed percentage setup you must update their employee record on the Tax Info tab to set the Tax Category to ATO-Defined (D) & the Tax Option to Downwards Variation (V).
This will in turn set their Tax Scale to Manual Tax Component. NB: When this Manual PAYG component is no longer required you will need to unset these fields to return the Tax Scale to the previous setting.

Note: You only need to update any employees that have manual PAYG pay components with a downward withholding percentage. Any employees with a fixed rate dollar amount or upward percentage variation can be left as is.