The Australian Taxation Office (ATO) rolled out Single Touch Payroll (STP) to streamline how employers handle and report payroll. Staying compliant with payroll regulations can be tricky, especially when it involves more detailed elements like superannuation.
Previously, many companies relied on manual, paper-based reporting methods, which were often inefficient and prone to errors. With the introduction of STP, payroll reporting has become standardized and digital through ATO-approved software solutions.
STP reporting kicked off on 1 July 2018, with STP Phase 2 becoming mandatory from 1 January 2022.
Today, STP is an essential part of paying staff and managing business payroll. Every business in Australia is now required to report through Single Touch Payroll.
You can either configure STP using accounting software or opt for professional payroll providers like Tax Visory to manage it for you. This guide outlines the key points you need to know:
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What Single Touch Payroll is
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How STP has transformed payroll reporting
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What data must be reported to the ATO
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Important payroll-related deadlines
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How Tax Visory can help with STP
Understanding Single Touch Payroll
Single Touch Payroll is a digital method created by the ATO for reporting employee payroll information. It allows businesses to send payroll data directly from their STP-compliant software to the ATO.
This system simplifies the reporting process by enabling employers to submit salary, deductions, and super contributions each time they process a pay run. Its main goal is to enhance the efficiency and accuracy of payroll compliance.
The Impact of STP on Payroll Reporting
Before STP, a significant portion of Australian businesses didn’t meet payroll compliance standards. Xero once estimated that 20% of businesses still used handwritten records.
With STP now mandatory, businesses can no longer rely on manual paperwork. The initiative pushed employers toward a unified, cloud-based system, making reporting easier and more transparent.
However, businesses still need to stay vigilant about PAYG Withholding and the Super Guarantee (SG), as using STP doesn’t automatically ensure full compliance.
Initially required only for businesses with 20 or more employees, STP now applies to all employers. The rollout of STP Phase 2 in 2022 introduced further changes to the way payroll data is reported.
Required Information for the ATO
To meet STP requirements, businesses must send detailed payroll information to the ATO, including:
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Employee wages and salaries
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Redundancy and termination payments
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Return-to-work compensation
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Payments for unused leave
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Paid parental leave
Additionally, businesses need to report withheld tax amounts and include all relevant employees, such as:
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Full-time and part-time workers
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Overseas remote staff
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Employees on leave
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Unpaid or inactive employees
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Closely held payees (e.g., directors, shareholders)
If a reporting mistake occurs, you have 14 days to fix it—unless your pay cycle is longer, in which case you must correct it before the next payment is due.
Key Payroll Deadlines
At the end of each financial year, employers must submit a finalisation declaration to notify the ATO that payroll data for the year is complete. This is due by 14 July annually.
STP Made Easy with Tax Visory
Although STP has made payroll reporting more efficient, many businesses still find compliance a challenge. Since payroll is vital yet time-consuming, outsourcing can be a smart move.
Tax Visory offers comprehensive payroll services, including full STP support. To get started, just reach out and let them know what financial services you’re interested in—be it payroll, bookkeeping, or accounts management.
Not sure what you need? No problem. A Discovery call with a Tax Visory expert will help identify your business’s requirements. From there, Tax Visory creates a customized proposal tailored to your specific needs and industry.
Once you’re onboarded, a dedicated payroll specialist ensures your payroll system is fully compliant, handling everything from STP submissions to award rates and leave calculations—so you can focus on growing your business.
