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Australia Single Touch Payroll Guide

the Australian Single Touch Payroll. The guide covers: the STP reporting (the "real-time payroll reporting") — the "Single Touch Payroll (the STP)" is the ATO system that requires the employer to report the "payroll information" to the ATO in the "real time" (the "each time the employer pays the employee"); the STP replaces the "manual payment summaries" (the "former group certificates") — the employee can view the "income statement" (the "STP income statement") through the "myGov" account; the employer must report through the STP: (a) the "salary and the wages", (b) the "allowances" (the "travel, the meals, the laundry"), (c) the "PAYG withholding", (d) the "superannuation guarantee contributions", (e) the "reportable fringe benefits amounts"; the STP Phase 2 (the "expanded STP reporting from 2023") — the STP Phase 2 (the "STP2") requires the additional data items: (a) the "gross type" (the "code for each payment type" — the "salary, the wages, the bonuses, the commissions, the directors' fees"), (b) the "child support deduction", (c) the "employee's start date and the cessation date", (d) the "tax treatment of the termination payments", (e) the "country code for the foreign employment income"; the STP exemptions (the "exceptions for the small employers") — the employer with the "1 to 4 employees" (the "micro employer") can use the "STP-ready software" with the "simpler reporting" options; the employer with the "no internet access" or the "no digital capacity" can apply for the "STP exemption" (the "temporary or the ongoing exemption"); the employer who uses the "paper-based payroll" may be eligible for the "short-term exemption" if the employer cannot find the "cost-effective STP software".

STP Software and the Implementation

  • STP-ready software: The employer must use the "STP-ready payroll software" (the "approved software by the ATO" — the "Xero, the MYOB, the QuickBooks, the KeyPay, the Employment Hero"). The ATO publishes the "list of the STP-ready software" on the ATO website. The employer can choose the software based on the "business size, the features and the cost".
  • Payroll software for the micro employer: The micro employer (the "1 to 4 employees") can use the "free STP software" offered by the "ATO" (the "STP for the micro employers" — the "free online solution" through the "Business Portal"). The micro employer can also use the "low-cost commercial software" starting from $5 to $20 per month.
  • Year-end finalisation: The employer must "finalise" the STP data at the end of the income year (the "finalisation event" through the STP software by the "14 July" after the end of the income year). The finalisation locks the STP data for the employee's income statement. The employer who fails to finalise by the 14 July may face the "penalty for the late finalisation".

For the employer obligations and the PAYG withholding, see our Hiring Employees Guide →.

STP Penalties and the Compliance

  • Penalties for the non-compliance: The employer who does not report through the STP or does not report the correct information may face the "penalty for the failure to lodge the STP report" (the "FTL penalty" of $330 per 28-day period) and the "penalty for the incorrect STP reporting" (the "false and misleading statement" penalty of up to $11,100).
  • STP data corrections: The employer can correct the STP data through the "update event" (the "correcting the previous STP submission"). The correction can be made through the STP software by: (a) the "adjusting the pay run" for the current period, (b) the "lodging the STP correction" for the previous period, (c) the "contacting the ATO" for the complex corrections.
  • STP and the superannuation: The STP Phase 2 requires the employer to report the "superannuation contribution amounts" through the STP. The employer must also report the "superannuation liability" (the "amount owed to the super fund"). The ATO uses the STP data to monitor the "superannuation guarantee compliance" and to identify the late or the missed super payments.

For the superannuation guarantee and the employer super obligations, see our Superannuation Employer Guide →.