What is Single Touch Payroll (STP)?
Single Touch Payroll Phase 2 is the ATO's mandatory real-time payroll reporting system. Employers send pay information (gross pay, tax, super, allowances categorized) to the ATO with each pay event. Annual finalisation is due 14 July each year.
Current Rate (Real-time at each pay event; annual finalisation by 14 July)
N/A — no fee
Example
When an employer runs payroll on Friday, their accounting software (Xero, MYOB, AccountsOS) automatically sends the STP report to the ATO. Employees see year-to-date amounts in myGov.
How Single Touch Payroll (STP) works in Australia
Single Touch Payroll transformed how Australian employers report payroll to the ATO. Instead of an annual summary at year end, every pay run is transmitted to the ATO electronically as it happens — giving both employees and the ATO a real-time view of wages paid and tax withheld.
**Phase 1 and Phase 2 rollout**
- **Phase 1 (from 1 July 2018):** Mandatory for employers with 20+ employees. Reported gross income and tax withheld as aggregate totals. - **Phase 2 (from 1 January 2022):** Mandatory for all employers (micro-employers from 1 July 2023). Disaggregated reporting — every component of pay reported separately.
**What Phase 2 requires separately**
- Gross salary (base pay only) - Overtime (separately from salary) - Each allowance type (car, tool, uniform, travel, laundry — each its own code) - Leave payments (annual, personal, long service — each separately) - Bonuses and commissions - Salary sacrifice amounts (pre-tax super, other benefits) - Super guarantee amount - Tax withheld - HECS/HELP repayment components
This disaggregation allows the ATO to pre-fill employee tax returns accurately and to detect misclassified allowances or missing super without any audit.
**Annual finalisation**
By 14 July each year, employers must 'finalise' the financial year via their STP software. Finalisation confirms all pay events for the year are complete. Once finalised, employees can see their Income Statement in myGov and lodge their tax return.
The old PAYG Payment Summary (also called a Group Certificate) is no longer issued to employees. If an employee asks for one, direct them to their myGov account — their Income Statement has the same information.
**Micro-employer quarterly reporting concession**
Employers with 1–4 employees who engage a registered tax or BAS agent can use a quarterly reporting concession — reporting PAYG withholding quarterly via the BAS rather than at each pay event. However, super guarantee must still be paid quarterly (and from 1 July 2026, with each pay run under the Payday Super reform).
**Penalties for non-compliance**
Failing to report a pay event results in a penalty of A$210 per missed event for small employers (A$1,050 per event for large employers). More consequentially, employees cannot lodge their tax returns until their employer finalises — late finalisation creates friction with staff and may prompt ATO contact.
Related terms
Pay As You Go Withholding is the system Australian employers use to deduct tax from employee wages and remit to the ATO. Real-time reporting via Single Touch Payroll (STP) Phase 2 is mandatory at every pay event. Cash flow remittance is via BAS (quarterly or monthly).
Mandatory employer contribution to an employee's superannuation fund. The rate is 11.5% of ordinary time earnings for FY2024–25, rising to 12% from 1 July 2025. Must be paid quarterly by the 28th of the month following each quarter.
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