Key Takeaways
- Real-Time Payroll Reporting: Enables employers to submit payroll data, PAYG withholding, superannuation details and employee information to the ATO at every pay event.
- Automated Compliance Management: Supports accurate STP submissions, year-to-date tracking, finalisation reporting and audit readiness through connected payroll systems.
- Employee Pay Transparency: Gives employees access to updated income statements, tax details and payroll information through digital self-service channels.
Single Touch Payroll
Single Touch Payroll (STP) is the real-time payroll reporting system of the Australian Taxation Office. It mandates all employers to disclose payroll information electronically to the ATO at each pay event, instead of reporting the totals at year-end. When the pay run is conducted, the data is sent automatically by the employer’s STP-enabled software – no more annual payment summaries.
STP was introduced for all Australian companies in 2019 and replaced the old system, in which employers provided staff with individual payment summaries and completed a yearly payment summary report with the ATO. Pay data is now accessible to employees and the ATO when it is created, rather than waiting until the following tax year, with reporting on or before each pay day.
Why Did the ATO Introduce Single Touch Payroll?
STP was implemented by the ATO to consolidate payroll, tax withholding, and superannuation reporting into a single real-time data stream. The last annual reporting cycle saw considerable delays between when wages were paid and when the ATO could confirm that the associated tax withholding had been received. Those inadequacies allowed underpayment of tax and super to continue for months before a cross-check could uncover it.
STP completely affected the timing. Now the ATO receives pay event data each cycle, so it can pre-populate tax returns for employees in myGov, cross-check PAYG withholding against BAS lodgements, and identify anomalies between the amount reported and the amount paid. The system also feeds into Services Australia, providing income testing for family tax benefit, childcare subsidy, and other government benefits, without requiring additional reporting from the business.
What Data Does STP Report at Each Pay Event?
STP reporting covers the full set of payroll information the ATO needs to maintain accurate employee tax records. Every pay event sends the same data fields, which lets the ATO maintain a continuous view of each employee's year-to-date earnings, tax withholding and superannuation entitlements across all employers and all pay cycles in the financial year.
- Gross wages and salaries: Every pay event reports the gross pay for each employee, including ordinary hours, overtime, allowances and bonuses processed in that cycle.
- PAYG withholding amounts: The tax withheld from each employee's pay reports through STP at every cycle, building a continuous record of the year-to-date PAYG withholding for the employee.
- Superannuation liability: The employer's super guarantee liability for each employee per pay event appears in the STP report, giving the ATO visibility of the SG amount the employee should receive from the employer.
- Employee details: Tax File Numbers, names, addresses and employment basis details appear in the STP report, replacing the separate TFN declaration submission to the ATO.
How Does STP Work Technically?
STP operates through STP-enabled payroll software that connects to the ATO's secure reporting channel. When the employer processes a pay run, the software builds the STP data file from the pay event and transmits it to the ATO before or on the date the employee receives their pay. The submission produces a confirmation that the ATO has received the report, which the payroll system stores against the pay cycle record.
- STP-enabled software: Employers must use payroll software that is STP-enabled and certified by the ATO. Manual reporting through paper or spreadsheet templates does not satisfy the STP obligation.
- Submission timing: Reports must reach the ATO on or before each payday. Late submissions trigger ATO notifications and can attract penalties for repeated or deliberate failure.
- Confirmation and error handling: The ATO returns a confirmation or error response for each submission. Errors require the employer to correct the underlying data and re-submit before the report is considered lodged.
- Year-to-date reporting: Each STP submission reports year-to-date figures for each employee, which lets the ATO maintain accurate cumulative records even if a single pay event submission fails or is delayed.
How Does STP Affect Employees?
STP changed how employees access their pay and tax records. Employees no longer receive annual payment summaries from their employer. Instead, their income statement appears in myGov and is updated automatically each pay cycle through the STP data the employer submits. Employees check their year-to-date pay, tax withheld and super accrued at any time during the year through their myGov account.
The income statement becomes "Tax ready" after the employer lodges the STP finalisation declaration, which confirms the year-to-date figures are complete and correct. Employees can then use the finalised income statement to complete their tax return, with most of the relevant fields pre-populated by the ATO from the STP data. Services Australia also draws on STP data to determine income-tested government payments.
What Are the STP Lodgement and Finalisation Deadlines?
STP carries two distinct deadline obligations: the at-source submission for each pay event and the annual finalisation declaration at the end of the financial year. Missing either deadline creates compliance exposure that the ATO pursues through automated notifications and, for repeated failure, formal penalty assessments.
- Pay event submissions: Every pay event must report to the ATO on or before the payday. Submitting late or skipping a pay event triggers an ATO "Action Required" notification.
- Annual finalisation: The finalisation declaration is due by 14 July following the financial year-end. This declaration confirms the year-to-date figures for each employee and makes the income statement "Tax ready" in myGov.
- Closely held payee finalisation: Employees who are family members or related-party payees have a later finalisation deadline of 30 September following the financial year-end, recognising the different reporting cycle these payments often follow.
- Amendment process: Errors discovered after finalisation are corrected through an STP update event submitted promptly, with notification to the affected employee to confirm the change is reflected in their income statement.
How Does STP Connect to PAYG Withholding and Superannuation?
STP serves as the data backbone connecting PAYG withholding, superannuation and payroll reporting. The ATO compares the cumulative PAYG withholding reported through STP each quarter against the W1 figure on the employer's BAS. Discrepancies between the two reporting channels are flagged automatically by ATO systems and rank among the most common triggers for compliance activity against employers.
From 1 July 2026, STP carries an even larger compliance role. Payday Super uses STP as the primary reporting mechanism for super guarantee compliance. The ATO compares the super liability reported through STP at each pay event against the super contributions funds confirm receiving within the seven-business-day window. Any mismatch becomes visible to the ATO in near real-time.
Ramco Payce automatically submits STP reports at every pay event and reconciles cumulative STP data with BAS figures before each quarterly lodgement. Payroll Workspace gives payroll operators visibility into the status of every STP submission across all entities before payment release.
How Does Ramco Payce Support Single Touch Payroll Compliance?
Ramco Payce submits STP-compliant reports to the ATO at every pay event across all active Australian entities from a single platform. The system maintains year-to-date figures for each employee, generates correct income type classifications and lodges the finalisation declaration by the 14 July deadline each financial year. Every submission produces a timestamped audit record retrievable on demand.
BInGO delivers STP reconciliation reporting that finance teams use to verify cumulative STP data matches BAS lodgements before each quarterly cycle. Daily HR gives employees self-service access to their year-to-date pay, tax withholding and superannuation accrual, reducing the volume of enquiries HR teams handle during income statement finalisation each July.
Book a free demo to get started.