insight
Your guide to Single Touch Payroll (STP)
Published on 2 Feb. 2026 - Reading time: ~8-10 mins
Australian workers are experiencing increased workplace demands. ADP’s People at Work: A Global Workforce View 2025 report revealed that 78% of Australian employees feel overloaded at work. Payroll teams face strict compliance requirements in particular. Fortunately, Single Touch Payroll (STP) simplifies payroll reporting and improves consistency.
Table of Contents
What is Single Touch Payroll?
Single Touch Payroll (STP) is an Australian Taxation Office (ATO)initiative that standardises and streamlines payroll reporting for businesses.
Single Touch Payroll legislation Phase 1 was rolled out gradually from 2018 and Phase 2 commenced in 2022. Now, by law, businesses must utilise STP software solutions and/or upgrade to the latest STP-enabled version. This enables the ATO to automatically collect information from the payroll software, allowing for more accurate taxation.
STP non-compliance can result in failure to lodge penalties, unless deferred or exempt.
How Single Touch Payroll works
The ATO introduced STP to digitise and standardise payroll reporting for all businesses. Everything is brought together into one, simple solution. It means Single Touch Payroll reporting must provide the ATO with information on wages and salaries, pay as you go (PAYG) withholdings and superannuation liability data each pay event.
This could seem like Single Touch Payroll means extra work for payroll teams, but that’s not the case. You run your payroll as usual with no need to change pay run frequency. Just let the STP-enabled payroll software report information to the ATO as employees are paid and then collate it for finalisation on the STP due date.
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STP reporting updates employee income tax information every pay event, enabling employees to access up-to-date personal tax information via their MyGov account. So, letting employees know about tax obligations is no longer down to HR or Payroll teams. Employees can self-serve, which frees up the time of payroll teams.
By streamlining and automating payroll reporting, the lives of payroll people and employees are made easier. STP-enabled software gives you the confidence that your compliance is accurate and complete, while Single Touch Payroll due dates are met to avoid any costly FTL penalties.
Compliance and reporting in Single Touch Payroll
Employers have both compliance and reporting obligations under Single Touch Payroll. The compliance requirements include utlising STP-enabled software that meets the ATOs software standards and reporting employee pay information on or before each payday.
When considering STP reporting an employer is required to report employee salaries and wages, PAYG withholdings and superannuation each pay event. STP software solutions must support inclusion of terminated payments and closely held employee information. A major benefit of STP pay event reporting is a simplified year-end reporting for both employers and employees. Single Touch Payroll finalisation due date is 14 July, reviewing your pay runs and making any required corrections each pay run will add to a ‘hassle-free’ EOFY for employers.
STP reporting has digitised the issuance of Income Statements. Employees can access their income statements before or on 14 July directly from their MyGov account or talk with their registered tax agent.
Single Touch Payroll troubleshooting
The ATO provides guidance on how to rectify STP issues. Employers will need to correct the error via their STP software solution and resubmit the Pay Event file. This corrected information will replace the previously submitted pay event.
Overall, payroll teams should address any STP and employee privacy queries as swiftly and accurately as possible to avoid further stress and possible penalties.
Frequently asked questions
What are the benefits of Single Touch Payroll for businesses?
Streamlining and standardising payroll processes works for everyone. A good STP lodgement process pulls together salary, PAYG and superannuation liability data ready to be reported to the ATO. Think of it as an STP checklist for businesses so you know you are on the right track with payroll reporting and compliance. This enables them to avoid STP penalties and fines or more serious reputational ramifications.
How do I finalise my EOFY STP report?
Finalise your EOFY STP report through your STP software. This confirms to employees that you’ve logged all their pay over the year and accompanying taxation paid through PAYG or other means. Employees can then access their tax information via MyGov. The income statement will show up as ‘tax ready’ once completed from the STP payroll side, so they can submit their personal tax return. This is better for STP and employee privacy, and is all underpinned by STP data security that meets Australian Privacy Principles legislation.
What are the deadlines for STP reporting and finalisation?
The Australian tax year runs from 1 July to 30 June, with the EOFY STP reporting due date just two weeks later, on 14 July annually. That’s unless you are dealing with closely held payees – such as family-owned businesses or directors, shareholders and trustees – then you submit on 30 September.
How does STP affect my tax reporting?
Tax reporting is simplified into one annual STP reconciliation process through digital submission. STP and superannuation data is submitted to the ATO every pay run , eliminating the end-of-the-year rush. The burden of individual end-of-year tax reporting is taken on by the employee. STP reporting processes do not need to impact pay run frequency, which you can operate as you usually do.
What software can I use for STP compliance?
As an STP implementation guide, there are three software pathways payroll teams can use to meet STP compliance. Either an STP add-on to existing payroll software, new software with it built into the platform or outsourcing it to an Australian payroll specialist. ADP offers tailored packages for organisations of any size, ensuring the most up-to-date rules are followed, even for small business payroll, so every compliance box is ticked.
What happens if I miss an STP deadline?
Rectify any missed STP finalisation due dates as soon as possible or you may incur financial penalties. To avoid this, keep in contact with the ATO and lodge a missed report straight away. If a regular payment has been missed, this can be reported in the next pay run — just make sure the year-to-date data is correct. If there’s not another pay run, update within 14 days so the ongoing data stays current.
How do I correct errors in my STP submissions?
There are several ways to update STP reports and correct reporting errors. STP payroll reporting is divided into payroll events, which can be retrospectively changed. This can be done either through update events, for non-payment data correction, or adjustment events, for payment increase or decrease corrections. If needed, you can also resubmit your data using Full File Replacement (FFR), if your STP payroll software allows.
What are the key changes in STP Phase 2?
STP Phase 2 further enhanced the amount and type of information that needs to be shared with the ATO. Each pay event employers will be including:
- Employee tax file number (TFN) declaration details.
- Employment basis (e.g., full-time, part-time, casual).
- Allowances, deductions, and reimbursements with more specific categories.
- Lump sum payments (e.g., termination payments, bonuses) with detailed breakdowns.
- Salary sacrifice amounts for superannuation and other benefits.
For future information on the STP Phaser 2 categories, refer to the ATO’s STP Phase 2 Checklist.
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