STP Phase 2 & Tax File Number Declarations

STP Phase 2 & Tax File Number Declarations

Employee onboarding Apps mean that gathering information from a new employee is more efficient and streamlined. The employee can type their contact, banking, tax, and super information into the App, and it will automatically be added to their employee record in the accounting software, saving time for the payroll staff.

This seems like less paperwork, right?

But, is it? The answer depends on the App you are using

• Does the App lodge the Tax File Number (TFN) Declaration electronically with the ATO? If it doesn’t, you definitely need a paper TFN Declaration form completed by the employee.
• If the App does lodge the TFN declaration electronically with the ATO, does it also obtain an electronic signature from the employee? If not, you definitely need a paper TFN Declaration form completed by the employee.
• If the App both requires an employee electronic signature & lodges the TFN Declaration electronically with the ATO, you won’t need a paper TFN Declaration, as long as you can retain a record of the electronically signed TFN Declaration to produce during an ATO audit.

Our Check List for onboarding employees in accounting software

• Invite the employee to use the Onboarding App
• Check the information sent through the App by the employee for errors & update any missed information (use Employment Agreement, Application, TFN Declaration, etc)
• Create any new pay items or payroll categories required for Fair Work compliance
• STP1 Lodge the TFN Declaration & retain a record
• STP2 retain a signed TFN Declaration (electronic or paper form)
  Note: STP Phase 2 does not require a copy of the TFN Declaration to be lodged, because the information is sent in every STP2 pay run report to the ATO.
• Provide Superannuation Choice & retain signed proof
• Complete the rest of the employee record (contact/card)
• Provide the Fair Work Information statement(s) and retain signed proof

Payroll staff still need to check that records are kept for the relevant period, and that each employee is paid compliantly. The responsibility for that has, in no way, been moved to the employee.

So what’s changed … not much!

ATO References:

https://www.ato.gov.au/Forms/Lodging-tax-file-number-(TFN)-declaration-data-online/

https://softwaredevelopers.ato.gov.au/TFNDecElectronicSignatureGuidelines