Payroll & super
Single Touch Payroll
Single Touch Payroll (STP) is the ATO's mandatory digital payroll reporting system. STP-enabled software sends salaries and wages, PAYG withholding and superannuation liability to the ATO each time you run payroll. It replaced annual payment summaries; employers instead lodge a finalisation declaration by 14 July after each financial year.
STP turns each pay run into a report. When you process payroll in STP-enabled software, a pay event is transmitted to the ATO on or before payday containing each employee's year-to-date gross pay, tax withheld and super liability. There is no separate form to fill in: the reporting rides on the payroll you were running anyway. Because the ATO receives data progressively, employees see their year-to-date income in real time in their myGov income statement, and the old end-of-year payment summary (group certificate) no longer exists.
STP has been mandatory for employers with 20 or more employees since 1 July 2018 and for all employers, including those with a single employee, since 1 July 2019. Corrections are handled in the next pay event or an update event rather than by re-lodging, so an honest mistake fixed promptly is not a compliance problem. The end-of-year obligation is the finalisation declaration, due by 14 July, which tells the ATO the year's figures are complete and flips each employee's income statement to "tax ready" so they can lodge their return. The ATO's Single Touch Payroll guidance on ato.gov.au covers the mechanics and concessions.
STP Phase 2, mandatory since 1 January 2022, expanded what each pay event carries. Instead of a single gross figure, employers now disaggregate gross into components: ordinary earnings, itemised allowances by type, overtime, bonuses and commissions, directors' fees, paid leave, and salary-sacrificed amounts. Each employee also carries structured codes for employment basis (full-time, part-time, casual), a tax treatment code summarising how withholding is calculated for them, and country codes for certain visa holders. Child support deductions can be reported through STP as well, removing a separate remittance report.
The practical effect for a small employer is that payroll setup matters more than it used to. An allowance mapped to the wrong Phase 2 category, or a casual flagged as permanent, now feeds directly into ATO and Services Australia systems rather than sitting quietly in your own records; Services Australia uses the disaggregated data to assess income support, so miscoding can affect an employee's Centrelink payments. The upside is that getting the setup right once means every subsequent pay run reports itself. Modern payroll software handles the disaggregation automatically when earnings types are configured correctly, which is worth verifying at setup rather than at finalisation time.
STP compliance is mostly about dates, and there are few of them.
| Obligation | Deadline |
|---|---|
| Report each pay event | On or before the day employees are paid |
| Finalisation declaration | 14 July after the financial year ends |
| Closely held payees (family members, directors) | May be reported quarterly with the BAS; finalisation by 30 September |
| Fixing a reporting error | In the next pay event, or an update event within the ATO's correction timeframes |
Why it matters beyond the fines: STP is now the ATO's live view of your payroll, data-matched against your BAS labels W1 and W2 and against super fund contribution reporting, so gaps and mismatches surface quickly. That visibility is also the foundation of the payday super reforms, under which employers will need to get super contributions to employees' funds within days of each payday from 1 July 2026 instead of quarterly. Employers who keep STP clean and pay super with each pay run are already where the system is heading. Model the full cost of a hire, wages, super and on-costs together, with the OneBookPlus employer cost calculator.
The definitions above only get you so far; the free OneBookPlus employer cost calculator turns them into your own figures in seconds, no sign-up needed.
Yes. STP has applied to employers of every size since 1 July 2019. If your only workers are closely held payees, such as family members or directors, you can report their pay quarterly alongside your BAS instead of every payday, but you must still report through STP.
It is the end-of-year sign-off, due by 14 July, confirming the year's payroll figures are complete. It marks each employee's income statement in myGov as tax ready so they can lodge their return. It replaced issuing payment summaries and lodging a payment summary annual report.
No. Payment summaries were replaced by the income statement, which employees access through myGov or their tax agent. It updates with every STP pay event during the year and becomes tax ready once the employer lodges the 14 July finalisation declaration.
Last reviewed and updated: by Bishal Shrestha