What is Single Touch Payroll (STP)?
Single Touch Payroll is the ATO’s system for receiving payroll information each time you pay employees. Your STP‑enabled payroll or accounting software sends a pay event showing year‑to‑date amounts for each payee. This covers salaries and wages, PAYG withholding, and superannuation liability information. Employees can view their year‑to‑date data in myGov, and you complete an annual STP finalisation instead of issuing payment summaries.
STP Phase 2 expanded what you report, including disaggregated gross (breaking out overtime, allowances, bonuses, paid leave, etc.), income types, and certain child support and tax details. Most major payroll platforms support STP2 and provide in‑product prompts to map pay items correctly.
Australian context to keep in view
- You generally need a PAYG withholding registration before paying staff or directors and withholding tax.
- STP reporting is done through STP‑enabled software connected to the ATO (you may need to nominate your software ID).
- Lodge a pay event on or before pay day and finalise at year end—usually by 14 July; some concessions apply.
- STP reports super liabilities but does not pay super—pay via SuperStream by the quarterly due dates.
- STP does not replace BAS/IAS—you still report W1/W2 and lodge BAS or IAS as required.
Who must report and common concessions
All employers must report through STP, including small businesses with one employee and employers paying closely held payees (e.g. directors or family members). In limited cases, the ATO may allow concessions:
- Closely held payees: You may be able to report quarterly (aligned to your BAS due dates) through a registered agent.
- Digital access issues: If you have no or intermittent internet, you may be able to apply for an exemption or deferral.
- Seasonal or intermittent employers: Talk to your BAS agent or the ATO about the best reporting approach.
If you use contractors, remember STP only applies to employees and certain deemed employees. Review engagement status carefully—misclassification creates risk for PAYG and super.
Key dates and deadlines
Each pay run
Lodge a pay event on or before the day you pay employees.
Year‑end finalisation
Finalise STP for each employee so their Income Statement is “tax ready” in myGov. Most employers aim for 14 July; some have later dates (e.g. closely held payees may align to tax return due dates).
Super due dates
Pay super at least quarterly via SuperStream (28 days after the quarter). STP does not make the super payment.
BAS/IAS
Continue to lodge BAS/IAS and report W1/W2. STP and BAS serve different purposes and both are required.
How to set up STP the right way
- Confirm registrations: ABN/WPN and PAYG withholding as required.
- Choose STP‑enabled software: Use payroll or accounting software that supports STP Phase 2.
- Map pay items: Separate paid leave, allowances, overtime, bonuses, termination types and ETPs to STP2 categories.
- Validate employee data: Legal names, TFNs, addresses, date of birth, super funds and USIs.
- Connect to the ATO: Nominate your software ID in Access Manager or call the ATO, then send a successful test/lodgement.
- Set a payroll routine: Reconcile each pay, reconcile monthly/quarterly to BAS W1/W2, and plan the year‑end finalisation window.
A BAS agent, bookkeeper or payroll specialist can complete the above, document your workflow, and lodge on your behalf.
Common STP errors and how to fix them
- Incorrect disaggregation (STP2): Map allowances, leave, overtime and bonuses to the correct categories.
- Wrong payee identifiers: Keep names, TFNs and payroll IDs consistent to avoid duplicate records.
- Missed or late events: Lodge an update event promptly; repeated late lodgements can attract penalties.
- Director fees and closely held payees: Use correct income types and consider quarterly concession rules.
- Terminations and ETPs: Select the correct code and tax treatment; reissue if you misclassified.
- Finalisation not completed: Employees won’t see “tax ready” in myGov until you finalise—don’t skip this step.
STP, BAS and super — how they connect
STP sends payroll information to the ATO each pay. BAS/IAS is where you report W1 (gross wages) and W2 (PAYG withheld) for the period and pay the liability. Superannuation must be paid separately through a SuperStream‑compliant clearing house by the due dates. Aligning these three processes reduces errors, penalties and cash flow surprises.
What to compare before you commit
Scope
Confirm the work covers STP setup/review, pay item mapping to STP2, pay run processing, error corrections, year‑end finalisation and procedure docs.
Software fit
Check capability in your current payroll or accounting platform and whether they can explain the STP workflow and ATO connection.
Turnaround and communication
Ask about pay‑run cut‑offs, how urgent fixes are handled on pay day, and who lodges finalisation.
Commercial fit
Compare fixed fees vs hourly, pay‑run frequency, reporting rhythm, and whether you need compliance only or broader advisory.
Frequently asked questions
What is Single Touch Payroll?
It’s the ATO’s mandatory system for reporting payroll information each time you pay employees. Your software sends year‑to‑date pay, PAYG withholding and super liability details to the ATO. At year end, you finalise STP instead of issuing payment summaries.
Who needs to use STP?
All employers, including small businesses and those paying closely held payees (e.g. directors or family members). Limited concessions exist—ask a BAS agent if you think one may apply.
What did STP Phase 2 change?
STP2 requires more detailed reporting, including disaggregated gross, income types, and certain child support/tax fields. Most software now supports STP2 mapping.
When do I lodge and finalise?
Lodge a pay event on or before pay day. Finalise at year end—generally by 14 July—so employees see “tax ready” in myGov. Some employers with concessions may have later dates.
Do I still lodge BAS or pay super separately?
Yes. STP does not replace BAS/IAS or super payments. Continue to lodge BAS/IAS and pay super via SuperStream by the due dates.
How do I fix an STP mistake?
Submit an update event or correct it in the next pay (depending on software and error type). Keep year‑to‑date figures accurate and re‑finalise if the mistake was after year end.
Can a BAS agent lodge STP for me?
Yes. Registered BAS agents and payroll specialists can set up STP, process pay runs, lodge pay events, and complete year‑end finalisation on your behalf.
What about contractors and directors?
STP covers employees and certain deemed employees. Directors’ fees are reportable in STP with the correct income type. Review contractor status to avoid PAYG and super errors.