A petition to delay the start date of the second phase of Single Touch Payroll is underway, with a payroll association slamming the ATO’s six-month deadline as “highly negligent”.

On Tuesday, the ATO confirmed that is was still working towards a 1 July 2021 start date for STP phase 2, which will see employers required to report additional payroll information each pay day.

Some of the key changes include moving away from payment summary categorisation of income to reporting by income type, including gross, allowances (tuple), overtime, paid leave (tuple), director fees, salary sacrifice (tuple), bonuses and commissions.

The Association for Payroll Specialists (TAPS) head Jason Low said that while the benefits of STP phase 2 were broadly supported, the 1 July 2021 deadline was an impossible deadline for businesses who were still grappling with the impacts of COVID-19.

“While a positive act, its severe deadline is highly negligent of the work needed to carry out a smooth transition, and is bound to cause a series of disasters to the payroll industry and Australian economy as a whole,” Mr Low said.

“Adapting to all of this is no small task. Software developers will have to rely on the finalised specs, which ATO has yet to release, to write, trial and finalise the software functionality to reflect the new components before rolling it out to customers. Only once that’s done can we begin educating employers on the new software and its impact on the way they manage payroll.

“The proposed deadline of July 1st 2021 means people are forced to spend the next six months rushing to get work done that would have otherwise taken 12 to 18 months to complete.

“The consequence of this is very clear — there will be a massive risk of non-compliance, incorrect payroll data entered, as well as negative public reactions from employers, industry bodies and registered agents.”

Mr Low said TAPS would now make a formal submission to the ATO to delay the start date to 1 July 2022 at the earliest.

“Six months of working time leaves absolutely no breathing room for everyone involved,” Mr Low said.

“With this in mind, TAPS is encouraging businesses and individuals to have their voice heard as part of the open consultation by completing a submission expressing their concerns, request for a transition period or any comments on the feasibility of a July 1st implementation of STP2 ahead of January 14th."

“There is an opportunity to negate these detrimental consequences of an unachievable timeline that will be felt by every Australian employer if implemented.”