Single Touch Payroll: what employers need to know
Single Touch Payroll (STP) is how employers report wages, tax withheld and super to the ATO. Instead of issuing payment summaries at the end of the year, you report each pay run as it happens, and finalise the year by 14 July.
How it works
Each time you pay employees, your STP-enabled payroll software sends a report to the ATO showing, for each employee:
- gross pay, broken into categories such as salary, overtime, bonuses, allowances, leave and termination payments,
- PAYG tax withheld,
- super guarantee and salary sacrifice amounts.
The ATO uses this to pre-fill employees’ tax returns and to check that tax and super have been paid.
Who must report
All employers, regardless of the number of employees. That includes family businesses paying family members, and companies paying directors’ wages.
Payments to genuine contractors aren’t reported through STP, except under voluntary agreements or where they’re employees for super purposes. See contractor or employee?
Finalisation by 14 July
At the end of the financial year, you must make a finalisation declaration for each employee by 14 July. This tells the ATO the year’s figures are complete, and changes the employee’s income statement in myGov to “tax ready”.
Until it’s finalised, employees see their income statement as not yet tax ready and can’t lodge with confidence. Missing the deadline can attract penalties.
Closely held payees, such as family members in a family business, directors and shareholders of a family company, have until the due date of their own tax return.
Common mistakes
- Wrong pay categories, such as allowances or leave coded as ordinary wages, which flow through to employees’ returns.
- Not finalising by 14 July, or forgetting employees who left during the year.
- Correcting errors outside the software, so the ATO’s data and your payroll don’t match. Fix errors in the next pay event or with an update event.
- Super reported but not paid. STP shows the ATO what super you owe, which makes unpaid super easy for it to identify.
- Director wages paid informally rather than through payroll.
STP and super
From 1 July 2026, under Payday Super, employers must pay super at the same time as wages rather than quarterly [check: confirm Payday Super commencement and deadline]. Because STP already reports super each pay day, the ATO can match what’s reported against what funds receive. Make sure your software and clearing house are set up for it. See super basics.
Choosing payroll software
Xero, MYOB and QuickBooks all include STP-compliant payroll, and set up properly they also handle leave, award rates and super. Getting the setup right at the start, with the correct pay categories and award, saves a lot of fixing later.
How we help
Year-end STP finalisation is included in our Compliance, On Track and Growth business packages. Payroll processing through the year, including pay runs, payslips, super and STP reporting, is quoted separately based on the number of employees and how often you pay. See business packages.