Tag: employer

Xero STP Phase 2 leave transition

Xero STP Phase 2 rollout

Posted on | by Allan Hall

Everything to know (and do) for the final stage of Xero’s STP Phase 2 rollout

By now, most business owners are probably familiar with Xero’s approach to getting payroll data ready for Single Touch Payroll Phase 2.

This will see businesses build on their existing STP reporting to share more information with the ATO and other government agencies each time employers process a pay run. And the good news is, Xero now arriving at stage three – the final stage of their transition to STP Phase 2.

Xero’s STP Phase 2 reporting deferral deadline is now 31 March 2023 meaning Xero Payroll users will have until the New Year to activate STP Phase 2. However, you can get your data ready today. In fact, it is recommended that you complete each stage sequentially as they are made available in Xero Payroll.

The three stages of transitioning to STP Phase 2 in Xero

Stage one – Delivered in August: The first part of this process is transitioning your existing employee profiles to be STP Phase 2 compliant. This stage also includes providing additional information when onboarding new employees to Xero Payroll.

Stage two – Delivered in September: You’ll need to identify and update certain pay items with the new earnings categories defined by the ATO for STP Phase 2 reporting.

Stage three – Rolling out from late October: This is the final stage in the STP Phase 2 transition which will break down paid leave into additional subcategories. We’ll support you with a guided experience in payroll so you can easily update existing paid leave types to meet the new ATO reporting requirements.

So you’re ahead of the deadline, it’s best to transition your payroll data as soon as possible. Head over to the STP 2 Portal in Xero Payroll to progress through each stage.

Stage three involves the introduction of new paid leave categories

STP Phase 2 introduces a set of new ATO reporting categories for use in your leave pay items. You will need to categorise any existing paid leave types you have set up in Xero Payroll. The categories available include:

Other paid leave (Type O)

  • Annual leave
  • Compassionate and bereavement leave
  • Family and domestic violence leave
  • Long service leave
  • Personal (sick/carer’s) leave
  • Rostered day off
  • Special paid leave
  • Study leave
  • Time off in lieu

Ancillary and defence leave (Type A)

  • Community service leave
  • Defence reserve leave
  • Jury duty leave

When these types of leave payments are correctly categorised in STP filing, the data can be more easily shared across government departments (like Services Australia). Learn more about the process of updating leave categories in Xero Payroll here:

Xero will be launching the leave pay item transition tool to help you with this final stage and has built a transition tool to assist you with easily categorising your existing leave pay items to meet STP Phase 2 reporting requirements. Xero has also been rolling out changes to Xero Payroll in preparation for STP Phase 2. As a result, it’s likely that some leave pay items may already have the correct reporting category assigned.

What Xero Users need to do now

Head to the STP 2 Portal in Xero Payroll and progress through each stage of the transition process to get your payroll data ready for Phase 2 reporting.

  • Stage one: Updating employee records to meet the new STP Phase 2 filing requirements.
  • Stage two: Updating income pay items to the new STP Phase 2 filing requirements.
  • Stage three: Categorising your existing paid leave types to the new filing requirements.

It’s important to mark each stage as complete in the STP 2 Portal before moving forward. This ensures your payroll data is accurate and could help reduce filing errors later in the financial year. Once you’ve completed all three stages, your business will be ready to switch to STP 2 later in the financial year.

Xero will be ready to report your updated payroll data to the ATO by mid-December 2022. While there is a deferral until 31 March 2022, we strongly recommend that you get your data ready for the transition as early as possible. If you’re unsure about updating your payroll data for STP Phase 2, contact our Bookkeeping team on 02 9981 2300.

CONTACT ALLAN HALL

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STP Phase 2 reporting errors

Posted on | by Allan Hall

Getting STP Phase 2 reporting right

Single Touch Payroll (STP) Phase 2 reporting started on 1 January 2022.

So far, more than 200,000 employers have started reporting STP Phase 2 information for over 3 million individuals.

We’ve noticed some mistakes people are making as they move to STP Phase 2 reporting and are sharing the most common mistakes so you can avoid them, such as:

  • re-mapping pay codes or categories incorrectly. Check if you have pay codes for items you need to list separately, such as bonuses, commissions and overtime
  • continuity of year-to-date (YTD) reporting. If the solution you use requires you to input your existing YTD amounts manually; make sure you bring over all the amounts you need to
  • incorrectly categorising allowances. You must report all allowances separately in your STP Phase 2 reporting, which includes 8 allowance categories and one for ‘other allowances’. Only report an amount as an ‘other allowance’ if it doesn’t fit into one of the 8 categories.

Related reading

Expansion of STP (Phase 2)

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outside the building

Closing for a well-deserved end of year break?

Posted on | by Allan Hall

It’s time to let your clients and employees know

Act now to ensure your client expectations and employee legislative requirements are met.

Informing Clients of Business Shutdowns

It is common for a workplace to shut down its operations over the Christmas-New Year period because of a reduction in business activity or because the majority of employees request to take annual leave.

It’s up to businesses to determine closure dates and ensure these are clearly communicated to clients as early as possible, so that reasonable expectations are set and deadlines are met without creating any unnecessary worry. Recommended communication includes separate emails to clients, newsletter footers, invoice footers, notes on email signatures or any combination of the above.

To assist with planning your shutdown period, the NSW gazetted public holidays for the upcoming holiday season are:

  • Christmas Day: Sunday 25 December 2022
  • Boxing Day: Monday 26 December 2022
  • Additional Public Holiday for Christmas Day: Tuesday 27 December 2022
  • New Year’s Day: Sunday 1 January 2023
  • Additional Public Holiday for New Year’s Day: Monday 2 January 2023
  • Australia Day: Thursday 26 January 2023

Get ahead of the game. Download our Business Shutdown Client Email template to send to your clients.

Employee Notifications

Employers planning to close over the Christmas-New Year period need to also correctly inform employees from now. Employers are obligated to formally confirm business closure dates and notify staff in accordance with award requirements.

Most awards will contain terms which allow employers to shut down the business for a period and send employees on designated annual leave. This is usually subject to an employer providing at least 4 weeks’ notice of the intention to do so, however certain awards may require a greater notice period.

It’s never too early to start planning. Download our Business Shutdown Employee Notice template.

Employee Leave Considerations

Annual Leave Requests

With the Christmas and Summer Holiday period fast approaching, you may also notice an increased number of annual leave requests waiting for your approval. For those businesses that shut down over this period, approving annual leave is usually a joyous task. However, for smaller businesses continuing to trade during this period, it can be a difficult juggling act to ensure you have enough employees on board to meet your customers’ needs while also ensuring employees receive a well-deserved break.

When reviewing annual leave applications, it is important to remember that you cannot unreasonably refuse to authorise an employee’s request to take annual leave. If you need assistance with understanding the rules surrounding ‘reasonableness,’ please do not hesitate to make contact with our HR team.

Can employees refuse to work on Public Holidays?

Employers can request that employees work on a public holiday if the request is reasonable. Likewise, an employee can refuse to work on a public holiday if the employer’s request is not reasonable. In determining whether the employer’s request is reasonable, under the Fair Work Act a broad range of factors are taken into account. These include:

  • The nature of the employer’s workplace and the nature of the employee’s work
  • The employee’s personal circumstances
  • Whether the employee could reasonably expect the employer might request work on the public holiday
  • Whether the employee is entitled to receive overtime or other penalty payments that reflects the expectation to work public holidays
  • The type of employment of the employee (eg whether full-time, part-time, casual or shift work)
  • The amount of notice in advance of the public holiday given by the employer to the employee
  • The amount of notice given by the employee when refusing a request to work on a public holiday

Unsure of what applies or what steps to take? Don’t guess – seek advice.

Our team at Allan Hall Human Resource Services have years of first-hand experience to guide you and your business to a safe, enjoyable, and carefree festive season.

If you require advice on the conditions relating to your Employer rights or obligations, please get in touch with our highly experienced HR team on (02) 8978 3752 or simply contact us below.   

CONTACT ALLAN HALL HR
payroll

Super Guarantee rate change reminder

Posted on | by Allan Hall

Super changes apply — don’t get caught short

To avoid additional costs, including the superannuation guarantee charge (SGC), employers must pay the correct amount of super for all eligible employees by the quarterly due date.

Whether you’re paying super weekly, monthly or quarterly, it’s important to check the super guarantee (SG) that you pay takes into account the new SG changes that started on 1 July 2022.

These were:

Employers must apply these changes to all the salary and wages paid from 1 July 2022, even if some of the pay period they related to was before 1 July 2022.

All other eligibility requirements for super remain in place. For example, an employee under 18 years of age must still work for you for more than 30 hours in a week to be eligible for super.

Employer actions

Make sure that:

  • your payroll and accounting systems are up to date and reflect the July updates to SG
  • you’ve calculated and paid the correct amount of SG for all eligible employees
  • SG amounts are paid in full by the due date.

NOTE: Employers must pay the SGC if your total SG amounts for the period 1 July 2022 to 30 September 2022 are not received by your employees’ super funds by 28 October 2022.

Failure to meet an employer’s SG obligations means having to pay the SGC. You’ll need to lodge an SGC statement and remit payment of the SGC to the ATO. This approach will cost more than paying the correct SG on time.

Penalties or charges may also be incurred. SGC is not tax deductible.

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public holiday australia

One-off Public Holiday on 22 September 2022

Posted on | by Allan Hall

Key areas for employers to consider

Thursday 22 September 2022 has been declared a one-off public holiday for the National Day of Mourning for Queen Elizabeth II.

Many of our clients have voiced concerns regarding the impact of this decision on their business, particularly in relation to an unexpected loss of trade, staff rostering, additional overtime payment costs, and reduced cash flow and profits.

Key areas for employers to consider

1. Open for trade – normal public holiday rules and entitlements will apply:

  • Trading rules: Employers who decide to trade on the public holiday must abide by the public holiday trading rules set out by the applicable state/territory government. Further information regarding the public holidays in your state or territory, can be found here: National Day of Mourning and other upcoming public holidays – Fair Work Ombudsman
  • Penalty rates and other award requirements: Employers who choose to remain open on the public holiday are obligated to pay the penalty rates set out in the applicable modern award or enterprise agreement. Other obligations may also apply in relation to the public holiday and your employees. Employers are encouraged to check the applicable modern award/s or enterprise agreement for the current penalty rates and other requirements. Should you need support, our experienced HR Consultants at Allan Hall HR are available to help.

2. Closed for trade:

Permanent employees who would usually work on 22 September are entitled to take the day off, and will be paid their base pay rate for the ordinary hours they would have otherwise worked on that day. The base rate of pay does not include:

  • Incentive based payments
  • Bonuses
  • Loadings
  • Monetary allowances
  • Over time
  • Penalty rates

Employers cannot change an employee’s days/hours to deliberately avoid this payment. Full-time and part-time employees have the right to be absent from work on public holidays, or to be paid the appropriate penalty rates under the applicable award or industrial instrument.

3. Staff scheduling changes:

  • Casual workforce: Employers may need to consider whether they will reduce their casual workforce to save costs or increase their casual workforce to meet an increased demand. Make note of any rostering requirements as per your company policy.
  • Notice regarding a change in roster: An applicable award or industrial instrument may contain requirements in relation to the period of notice required to be given by an employer to change an employee’s roster.

4. Changes to payroll:

  • If payroll is scheduled for 22 September, employers will need to consider delays in bank transfer of wages and whether they may need to move the pay date forward.
  • If an employee already has an annual leave day scheduled on Thursday 22nd, this will now need to be treated as a public holiday for payroll and leave accrual purposes.

Contact us

Our experienced HR Consultants are available to support you with any employee-related questions. Please get in touch with us today on 1300 675 393 or at [email protected].

July

Superannuation Guarantee changes

Posted on | by Allan Hall

Is your system updated for the latest SG changes?

From July 2022, the $450-per-month super guarantee (SG) eligibility threshold was removed.

This means that if an employee meets the other SG eligibility requirements, you must pay them SG, regardless of how much they earn. However, employees under 18 must still work more than 30 hours in a week to be eligible.

It’s important to make sure your payroll and accounting systems have been updated for salary and wages paid from 1 July 2022. This will ensure you correctly calculate your employee’s SG entitlement.

An employee’s eligibility for SG is determined when they are paid, not when they earn the income.

This means if you pay an eligible employee on or after 1 July 2022, you need to pay their super regardless of how much they have earned – even if all or part of the relevant pay period is before 1 July.

The ATO’s Superannuation guarantee eligibility decision tool can help you determine if your employees, including any contractors treated as employees for super purposes, are eligible for super.

You can also check out the Super guarantee contributions calculator to help you work out how much super you need to pay.

CONTACT ALLAN HALL

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person writing and typing on laptop

Single Touch Payroll Phase 2

Posted on | by Allan Hall

What every small business needs to know

Single Touch Payroll (STP) Phase 2 means every business that employs staff will be required to get on board with the expanded program.

STP Phase 2 requires additional information to be reported to the ATO, enabling other government agencies to leverage the STP infrastructure to receive information and support the administration of the social security system.

Single Touch Payroll Phase 2 in a nutshell

With STP Phase 2 reporting live from 1 January 2022, there’s expanded capturing and sharing of payroll and employee data as compared to the original rollout of Phase 1.

This extended capturing by the ATO is shared more widely with relevant government bodies – such as social services – and fills certain gaps in payroll information sharing that wasn’t previously being transmitted. This new data remit remains an automated process, handled through STP-compliant payroll software such as cloud accounting apps and payroll systems.

What the new is data being shared?

The ATO is looking to patch knowledge gaps in the payroll submission process to support social security purposes and get a better understanding of employee payment details.

So, in addition to the payroll and employee information you’re already sharing through STP Phase 1 (salaries, PAYG, superannuation), Phase 2 involves capturing the following pay items, employee records and new fields:

  • employment basis
  • paid leave
  • allowances
  • overtime
  • cessation details and termination reasons
  • child support deductions
  • salary sacrifice
  • lump sum payments
  • country codes

Under STP phase 2 reporting employers are also required to separately itemise the components which make up the gross earnings amount by reporting all allowances separately, not just expense allowances that may have been deductible on an employee’s individual income tax return.

Digital Service Providers (DSPs)

STP Phase 2 requires employers to fill out employees’ payroll data correctly in your chosen software solution. Be sure to use a DSP that can roll out compliance updates to their software.

Updates to STP will be made by DSPs on users’ behalf and they are working with the ATO to ensure timely and competent compliance and delivery. Employers are already filling out this payroll information, so there are no new fields to capture on your end. In this sense and the automated nature of STP, employers are not required to do anything further than what is already being done under Phase 1.

What it will do is decrease the compliance burden upon businesses in terms of reporting. For example, under Phase 2 employers are no longer required to submit TFN declaration forms.

What will not be changing

The rollout of STP Phase 2 following does not change:

  • the way Single Touch Payroll is reported
  • Single Touch Payroll reporting dates (on or before payday)
  • the types of employee payments required for Single Touch Payroll reporting
  • employers’ current tax and super obligations
  • end of year finalisation requirements and submission responsibilities

The next stage of the Single Touch Payroll (STP) journey is underway

STP Phase 2 will see businesses build on their existing payroll reporting to share more information each pay run.

Most employers are now reporting through STP. You will need to start reporting if you have not yet transitioned, unless you have an exemption or a deferral.

What do business owners need to do?

If you’re currently STP compliant with payroll software that’s enabled, you should be running your payroll as usual. If you’re a Xero or MYOB user, your DSP will confirm when your solution is ready for STP Phase 2 reporting.

If you have any queries or concerns over your payroll solution or if you need reassurance, please consult your Allan Hall bookkeeper or accountant.

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Related reading

Expansion of STP (Phase 2)
payroll

Expansion of STP (Phase 2)

Posted on | by Allan Hall

Single Touch Payroll (STP) is part of the government’s commitment to streamlining employer reporting obligations

Most employers are now reporting through STP. You will need to start reporting if you have not transitioned yet unless you have an exemption or a deferral.

In the 2019–20 Budget, the government announced that STP would be expanded to include additional information.

Including this additional information will:

  • reduce the reporting burden for employers who need to report information about their employees to more than one government agency
  • support the administration of the social security system.

The mandatory start date for STP Phase 2 reporting was 1 January 2022 however the ATO is working with Digital Service Providers (DSPs) that are updating their solutions to support Phase 2 reporting. Your DSP will confirm when your solution is ready:

  • Xero users have until 31 December 2022 to start reporting the additional information required for ATO STP Phase 2 (See STP Phase 2: Steps for a successful transition)
  • MYOB has obtained a deferral from the ATO which means users have until 1 January 2023 to move to STP Phase 2.

Some DSPs, despite their best efforts, will need more time to get ready and transition their customers. They will advise you if the ATO has approved a deferral for users to start reporting later than the mandatory start date.

If you can transition to STP Phase 2 reporting when your solution is ready, then you do not need to ask the ATO for more time.

If you need more time in addition to your DSP’s deferral, you must apply. See STP expansion (Phase 2) delayed transitions.

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Related reading — what small businesses need to know about STP Phase 2

Single Touch Payroll Phase 2
Allan Hall team poses at Australian Accounting Awards

Australian Accounting Awards 2022 winners

Posted on | by Allan Hall

Allan Hall Business Advisors wins Wellness Program of the Year at Australian Accounting Awards

AccountantsDaily announced the Australian Accounting Awards winners at the ninth gala event in Sydney. In a record field of 652 submissions and 297 finalists in 2022, Allan Hall Business Advisors took out one of only 14 National Group awards, winning the Wellness Program of the Year. 

Wellness Program award seal
Allan Hall named 2022 Wellness Program of the Year award winners

Demonstrating how employee initiatives enrich the understanding and importance of wellness among Australia’s accounting industry was key to being acknowledged in this award category.

Allan Hall has been actively advocating health and wellness initiatives, events and activities within the business and wider community for many years, recognising that the key to success is not only supporting clients but also the people within.

This made the award win a very special one as it provides industry recognition of the emphasis the firm places on its employees and their wellbeing.

Accepting the award, Allan Hall HR Director, Janelle Parish said, “To win this particular award would be special at any time but we are extremely proud to have won it this year, to be recognised nationally for our support of staff with our wellness initiatives over such a challenging period.”

“Our firm has a fabulous, collaborative culture with Directors and Managers who are all very supportive of employee wellbeing and any wellness initiatives put forward.”

“Promoting health and wellbeing has been an essential aspect of our HR management through our ‘Thrive’ wellbeing program which follows four pillars of mind, body, spirit and work culture. Our Thrive wellbeing committee was able to adjust our approach over the past 12 months to the challenging COVID-19 climate to ensure our employees’ physical and mental wellbeing remained a major focus.”

The Australian Accounting Awards are known as the benchmark for excellence nationally as they focus on professional development and innovation, and recognise the successes of accountants, bookkeepers, partners, superannuation specialists, thought leaders, executives, as well as rising stars of tomorrow.

In his opening address, Accountants Daily editor Philip King said the Australian Accountants Awards offer a moment to pause and honour the best of the best in the profession. View the full list of winners here »

Allan Hall Business Advisors was named Australian Accounting Awards Firm of the Year in 2021.

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