Single Touch Payroll (STP): what it is and how it works.
If you employ anyone in Australia — even one casual — you're required to use Single Touch Payroll (STP) to report wages, PAYG withholding and superannuation to the ATO every payday. Here's a no-jargon explanation of what STP does, what STP Phase 2 changed, and the mistakes that trigger ATO follow-ups.
Single Touch Payroll (STP): what it is and how it works.
If you employ anyone in Australia — even one casual — you're required to use Single Touch Payroll (STP) to report wages, PAYG withholding and superannuation to the ATO every payday. Here's a no-jargon explanation of what STP does, what STP Phase 2 changed, and the mistakes that trigger ATO follow-ups.
What is Single Touch Payroll?
STP is a reporting framework that requires employers to send payroll information to the ATO each time staff are paid — not once a year via a payment summary. STP pulls gross wages, tax withheld and super liabilities directly from your payroll software (Xero, MYOB, QuickBooks, KeyPay, etc.) and sends a 'pay event' to the ATO via a secure API.
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Why the ATO introduced STP
Before STP, the ATO had visibility of wages only once a year — often too late to catch unpaid super, under-withholding or sham contracting. STP gives the ATO real-time data, allowing them to nudge employers who fall behind on super, and to pre-fill employee tax returns with reliable income data on the first day of July each year.
How we help you make it happen.
From compliance to optimisation — pick a topic to explore how we work with you.
- Disaggregated gross income — separately report bonuses, commissions, allowances, overtime, leave
- Employment type — full-time, part-time, casual, labour hire reported explicitly
- Country code for working-holiday-makers
- Cessation reason when employees leave (resignation, dismissal, redundancy, etc.)
- Lump-sum payment types broken down (E, W, A, B, D and back-pay)
