What is the safest next step?

Use the page to clarify the issue, then compare the service pages linked below so you can move from a general question to the right kind of accounting support.

How Does STP Reporting Work

Q: How Does STP Reporting Work?

The short answer depends on your structure, software, reporting obligations and how much hands on support you need. The page explains the practical decision points to review first.

Q: What should I check before deciding?

Review your business structure, tax registrations, payroll needs, software stack, frequency of reporting and whether you need compliance only support or broader advisory input.

Q: When should I get professional advice?

It makes sense to get advice when the issue affects tax, structure, reporting deadlines, payroll obligations, trust distributions, director loans or significant business decisions.

What STP is and who must report

Single Touch Payroll is Australia’s real‑time payroll reporting system. When you pay employees, your software sends the ATO year‑to‑date details for gross earnings, tax withheld, superannuation and other payroll data.

Who reports: Australian employers who pay employees (including directors treated as employees and most closely held payees). Sole traders without employees do not report STP.
How it’s sent: Through an STP‑enabled payroll or accounting solution connected to the ATO.
What it covers: Salaries and wages, PAYG withholding, super information, allowances, deductions and other items required by STP Phase 2.

Need a walkthrough or a quick check of your setup? Our payroll services and BAS agent services can complete the configuration and reporting for you.

Ask about STP setup

How does STP reporting work? Step‑by‑step

Prepare to employ
- Hold an ABN or WPN and be registered for PAYG withholding.
- Choose STP‑enabled software and connect it to the ATO.
- Collect employee details (TFN, super fund/USI, email, address, start date).
Configure payroll (Phase 2 mapping)
- Map earnings (ordinary time, overtime), allowances, deductions, leave, child support and other items to the correct STP Phase 2 codes.
- Set employment basis (full‑time, part‑time, casual), income type (e.g. SAW, CHP) and any tax variations.
Run each pay
- Calculate gross, PAYG withholding and super; review net pay.
- Lodge the STP pay event on or before payday and make the payment to staff.
Pay liabilities
- Remit PAYG withholding through your activity statement cycle.
- Pay super to funds by the due dates (STP reports super owed; it does not pay it).
Fix mistakes (if needed)
- Minor adjustments: send an STP Update event.
- Wrong file sent: use a Full File Replacement (FFR) if your software supports it.
End‑of‑year finalisation
- Reconcile payroll and super; finalise employees by 14 July (most employers).
- Employees see “Income statement – Tax ready” in myGov once finalised.

If you’re switching software mid‑year, bring over year‑to‑date balances correctly so your STP totals remain accurate. A bookkeeper or tax accountant can review this before you lodge.

Get my payroll set up Explore accounting services

STP Phase 2: what changed and why it matters

STP Phase 2 expands the data you report so government agencies receive better detail without extra forms. For employers this mainly affects setup and mapping.

Disaggregation of gross: normal pay, overtime, paid leave, allowances and bonuses are reported separately.
Income types and employment basis: report codes for standard salary/wages, closely held payees, inbound assignees and more.
Cessation reasons: terminations include a reason code (e.g. voluntary, redundancy).
Child support: deductions and garnishees are included when required.

Most setup errors come from incorrect mapping of allowances, paid leave and termination details. If you’re unsure, ask for a Phase 2 health check.

Request an STP Phase 2 check

Deadlines, cycles and concessions

On or before payday: lodge the STP event when you pay employees.
Activity statements: report and pay PAYG withholding on your monthly or quarterly BAS/IAS cycle.
Super due dates: generally quarterly (28th day after the end of each quarter) unless you pay more frequently by agreement.
Finalisation: most employers finalise by 14 July; closely held payees may have extended concessions. Check your specific obligations.
Deferrals and exemptions: available in limited cases (e.g. extraordinary circumstances). Apply before you miss a deadline.

If you’re behind, it’s best to correct and lodge as soon as possible to reduce penalties and interest. A BAS agent can help with catch‑ups and ATO contact.

I need help catching up

Common scenarios and answers

New employer

Register for PAYG withholding, choose STP‑enabled software, collect employee and super details, map Phase 2, connect and lodge a test if your software allows.

Closely held payees

Family members and directors paid from a family business may be reported through STP with specific income types. Some concessions on timing may apply.

Contractors

Genuine contractors are usually paid via bills. If you withhold (no‑ABN or voluntary agreements) or treat them as employees, STP may apply.

Terminations

Check ETP rules, tax components and cessation reason codes. Incorrect mapping is a common cause of STP mismatches.

For repeat or seasonal hires, set employment basis correctly (e.g. casual) and review super eligibility and threshold rules.

Get advice for my situation

How STP links to BAS, payroll and bookkeeping

STP does not replace your BAS or payroll processing. It sits alongside them:

Payroll processing: Calculate pay, withhold tax, accrue and pay super, and lodge STP.
BAS/IAS: Report and pay PAYG withholding and other taxes on your activity statement. See BAS agent services.
Bookkeeping: Ensure pay items, leave, super and liabilities are reconciled so your STP totals match your ledger. See bookkeeping services.

If you want one team to cover all three, start with the accounting services hub or small business accountant pages.

Combine payroll + BAS support

Pre‑lodgement checklist

ABN/WPN and PAYG withholding registration confirmed.
Employees set up with TFN, super fund/USI and correct employment basis.
Phase 2 mapping complete for earnings, allowances, deductions and leave.
Super guarantee rates and thresholds correct for the year.
Banking authorisations and ATO connection tested.
Reconciliation of YTD figures before EOFY finalisation.

Run a payroll health check

Frequently asked questions

How Does STP Reporting Work?

Each time you pay employees, your payroll software sends a pay event to the ATO with year‑to‑date figures. You must lodge on or before payday, pay super to the funds, remit PAYG via BAS/IAS, and finalise by 14 July (most employers). Closely held payees have specific rules and some concessions.

What should I check before deciding?

Confirm your PAYG withholding registration, choose STP‑enabled software, complete Phase 2 mapping, set up employees correctly (TFN, super, basis), and decide who will run payroll, reconcile and lodge (in‑house vs payroll services/BAS agent).

How do I fix an STP mistake?

Use an Update event to amend year‑to‑date totals or a Full File Replacement if you need to replace a lodged file. Correct your ledger so STP, BAS and financial reports match.

Do I still issue payment summaries?

No. With STP you finalise at EOFY and employees access a “tax ready” Income Statement in myGov. Provide a summary only if the ATO has approved an exemption for you.

Does STP pay super for me?

STP reports super information to the ATO but you still need to pay super to funds via your clearing house by the due dates.

When should I get professional advice?

Get help when setting up Phase 2 mapping, handling terminations/ETPs, catching up missed lodgments, switching software mid‑year, or when closely held payees are involved.

Talk to a payroll specialist