Rules Mate

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STP Phase 2 readiness

STP Phase 2 expanded the payroll information you report to the ATO each pay run — mandatory since 1 January 2022 (subject to digital service provider deferrals). This scorer checks your reporting across the six Phase 2 categories: disaggregation of gross, employment conditions, tax treatment codes, income types, child support and lump sums. Confirm any gaps with your payroll software provider and the ATO.

Last verified: 1 July 2026
Your reporting profile
Payroll complexity
Phase 2 reporting categories

Disaggregation of gross

Payroll reports paid leave, allowances (itemised by type), overtime, bonuses & commissions, directors' fees and lump sums as separate items — not a single gross figure.

Salary sacrifice reported separately

Salary sacrifice (super and other) is reported as its own STP item so gross and reportable amounts reconcile.

Employment basis + cessation reason

Each employee's employment basis (full-time / part-time / casual, etc.) is reported, and the cessation type / reason is captured when they leave.

6-character tax treatment codes

A tax treatment code is reported per employee, covering tax scale, STSL / study loan and Medicare levy variations.

Income types + country codes

Each payment is classified by income type (salary & wages, closely held payees, working holiday makers, foreign employment, etc.) with country codes where relevant.

Child support via STP (optional)

Optional — child support deductions and garnishees can be reported through STP to reduce separate reporting to Services Australia.

Lump Sum E & back-payments

Lump Sum E amounts and back-payments are reported correctly with the relevant financial year, so employees are not over-taxed.

Reference tool — not legal advice. Results are general information based on published Australian regulatory sources. Industry-specific or sector-licensed obligations may apply on top of what this tool returns. Always verify with the primary source linked in your result, or a qualified professional, before acting.

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Frequently asked questions

When did STP Phase 2 become mandatory?
STP Phase 2 was mandatory for employers from 1 January 2022. Many digital service providers (payroll software) obtained deferrals from the ATO, which extended the practical go-live date for their customers. Confirm your specific start date with your payroll software provider.
What changed under STP Phase 2?
STP Phase 2 expanded the payroll information you report to the ATO each pay run. The main additions are disaggregation of gross (reporting paid leave, allowances, overtime, bonuses, directors' fees and lump sums separately), employment basis and cessation reason, a 6-character tax treatment code per employee, income type and country-code classification, optional child support reporting, and Lump Sum E / back-payment reporting.
Does STP Phase 2 affect Payday Super?
Yes. Accurate Phase 2 component reporting — particularly disaggregation of gross and salary sacrifice — feeds the super guarantee calculation. Getting Phase 2 right is a precondition for the Payday Super regime that begins 1 July 2026, when SG must reach the fund within days of each pay event.
Is this scorer a substitute for my payroll software or the ATO?
No. This is an educational readiness self-assessment. STP Phase 2 reporting is configured in your payroll software, so confirm your actual setup with your payroll software provider (DSP) and check the ATO's employer reporting guidelines. This tool does not lodge anything with the ATO.

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