Single Touch Payroll (STP) can cut duplicate reporting and some year-end paperwork for Australian employers by sending payroll information to the ATO through payroll software as part of paying employees. It does not guarantee a specific saving, make payroll calculations accurate, or transfer the employer’s responsibility to a software provider.
What Single Touch Payroll reports
The Australian Taxation Office (ATO) describes STP as the way employers report employees’ salary and wages, PAYG withholding and super information from payroll software when paying staff. Reporting began for employers with 20 or more employees on 1 July 2018 and extended to those with 19 or fewer employees from 1 July 2019, subject to exceptions, according to the ATO’s STP guidance, revised in 2024.
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Phase 2 reporting provides more detail about payment components and allowances. Employee income statements can show items such as gross pay, overtime, paid leave, bonuses and commissions, directors’ fees and salary sacrifice. The ATO uses reported totals to prefill tax returns.
Where STP can reduce payroll administration
Reporting happens alongside payroll
With STP-enabled software, the employer sends the report as part of the pay process rather than preparing a separate report to the ATO. This can remove a distinct reporting task from each pay cycle.
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Less duplicate entry on activity statements
When STP information is accurate and lodged on time, it can support prefilled electronic activity statements. Employers may then avoid entering the same payroll figures again. This depends on correct, timely reporting; prefill is not a substitute for checking the figures. See the ATO’s employer reporting guidelines.
Less year-end payment-summary work
For payments reported and finalised through STP, employers do not need to give employees payment summaries or lodge a payment summary annual report. Payments not reported and finalised through STP still require the applicable separate summary and reporting process.
Employees can access income information online
Employees and their tax agents can view year-to-date information in ATO services through the STP income statement, reducing reliance on paper summaries for covered payments. Information may take a few days to appear after a pay event. The ATO advises employees to wait until the statement status is “Tax ready” before lodging a return, because amounts may change before finalisation.
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What STP does not fix automatically
STP transmits payroll information; it does not verify that the underlying pay calculation or employee data are correct. Employers remain responsible for correctly configuring pay codes and allowance mapping, withholding the right tax, calculating super correctly, and paying liabilities in full and on time. Incorrect setup can send incorrect information more efficiently, rather than prevent the error.
The ATO does not publish a typical number of hours or dollars that employers save through STP in the sources cited here. The practical benefit depends on the employer’s payroll process, workforce and data quality; treat the savings as reduced administrative steps, not a guaranteed return on investment.
Finalising STP at the end of the financial year
Finalisation is the employer’s declaration that STP data for an employee is fully reported for the financial year. The ATO’s finalisation guidance states the usual declaration deadline as 14 July and notes that extensions are available in some circumstances. That page is dated 2022, so check current ATO instructions for the applicable deadline and any extension before acting.
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Once finalised, income statement information becomes “Tax ready” in ATO online services and is available for tax-return prefill. Payments outside STP reporting still need their applicable separate summary and reporting process.
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Use the ATO correction process for the relevant pay event if a report contains an error. The ATO’s STP error guidance recommends contacting the payroll solution provider for further help when needed. Correcting a report does not, by itself, correct an underlying underpayment: review the employee’s pay and any affected tax or super obligations separately.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What employers should check in 2026
ATO guidance published in 2026 says employers need to include year-to-date qualifying earnings and super liability in STP reporting each payday from 1 July 2026. If an employer cannot report those amounts from that date, the ATO advises starting as soon as possible and describes a transition approach. Check the current ATO Payday Super guidance and the payroll provider’s implementation instructions for requirements that apply to the business.
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Choosing or reviewing STP payroll software
Software enables STP reporting, but it does not take responsibility for the employer’s payroll accuracy. When assessing a solution, compare the operational fit rather than assuming that every product handles setup and corrections in the same way.
- Confirm it supports current STP reporting requirements, including applicable Phase 2 and 2026 changes.
- Check how pay codes, allowances and employee records are configured and reconciled.
- Find out how the system flags rejected reports and supports corrections.
- Assess whether STP reporting is integrated into each payroll run and whether its reconciliation or activity-statement data is useful.
- Compare total cost and support against workforce size and payroll complexity.
ATO guidance explains relevant reporting and correction obligations but does not rank vendors or identify one best product.
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