If your business has been paying employees and reporting through STP Phase 1 using Xero Payroll, it will need to transition into STP Phase 2 by the 31st March 2023.

Xero is implementing the transition from STP Phase 1 to STP Phase 2 in four stages:

Stage 1 - Transition of employees' and contractors' employment details

Stage 2 - Transition of Pay Items

Stage 3 - Transition of Leave Items and connection to the ATO

Stage 4 - Enrol in STP Phase 2

Xero has introduced an interactive checklist called the STP Phase 2 Resource Centre to ensure all areas of your Organisation are correctly and make Xero STP Phase 2 ready.

Although Xero provides a number of resources to help with your software transition to STP Phase 2, if you wish to take over this process on your own, it's equally important that you have a clear understanding of all the changes that have been introduced as part of STP Phase 2.

Whilst these user guides focus exclusively on setting up Xero for STP Phase 2, we have also developed comprehensive resources about all the changes introduced in the second stage of Single Touch Payroll. These resources are published in our website's blog section. We strongly encourage you to review these resources before you start working on your Xero Organisation's transition to STP Phase 2.

Using the Xero STP 2 Resource Centre

1. Go to Payroll > Single Touch Payroll
2. Select the [STP Phase 2] Tab
   
   è  The STP Phase 2 Resource Centre opens
   
   
   
3. The Resource Centre displays 4 steps:
   1. Update employee profiles
   2. Replace pay items
   3. Assign leave categories
   4. Filing pay runs with STP Phase 2
4. Each Step shows a status, your Xero Organisation will be fully set up for STP Phase 2 when all 4 steps are marked as Complete
5. Click on the Arrow down to expand each step 
   
   è  The STP Phase 2 resource centre Step 1 screen
   
   
6. From the Step details you can:
   • Access more information and resources on the relevant topic
   • Jump to the section in Xero that requires updating
   • Mark the task as complete once you have updated the relevant section
7. Once you have completed one step, you can move to the next one as soon as Xero makes it available