Is Single Touch Payroll mandatory for all employers?

Yes, STP is mandatory for all employers with one or more employees, regardless of business size. STP Phase 2 expanded reporting requirements became mandatory from January 2022. The ATO has granted some deferrals and concessions for specific situations, but the general requirement is universal.

Do I still need to provide payment summaries?

No. STP has replaced the need for annual payment summaries (previously called group certificates). Employers make a finalisation declaration through STP at end of financial year, and employees access their income statement via myGov. Employers must finalise by 14 July each year.

What software do I need for STP?

You need STP Phase 2 enabled payroll or accounting software. Most major Australian payroll solutions (Xero, MYOB, QuickBooks, KeyPay) are STP-compliant. Micro employers (1-4 employees) can use the ATO's simple STP solutions or no-cost/low-cost options from approved providers.

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Single Touch Payroll (STP)

Single Touch Payroll

Also known as:STPreal-time payroll reporting

An ATO reporting system that requires employers to report employee payroll information - including salaries, wages, PAYG withholding, and superannuation - directly to the ATO each time they run payroll.

In-Depth Explanation

Single Touch Payroll (STP) is a mandatory reporting obligation requiring Australian employers to send payroll information to the ATO each pay cycle. STP Phase 2, effective from January 2022, expanded the reporting requirements significantly.

STP Phase 2 reporting includes:

Gross payments: Salary, wages, and other payments
PAYG withholding: Tax withheld from payments
Superannuation: Employer super guarantee amounts
Income types: Salary and wages, closely held payees, working holiday makers, etc.
Country codes: For employees working across multiple countries
Tax treatment: How payments are taxed (regular, voluntary agreement, labour hire, etc.)
Child support: Garnishee and deduction amounts
Employment basis: Full-time, part-time, casual, labour hire

How STP works:

Employer processes payroll through STP-enabled software
Software transmits payroll data to the ATO in real time
The ATO pre-fills employee tax returns with STP data
Employees access their year-to-date information via myGov
End-of-year income statements replace payment summaries (group certificates)

Benefits of STP:

Eliminates the need for separate payment summaries
Provides employees with real-time access to payroll information
Reduces administrative burden at end of financial year
Enables the ATO to detect compliance issues earlier
Streamlines Centrelink and child support reporting

All employers with employees are required to report through STP, regardless of size. Micro employers (1-4 employees) can use simplified reporting options.

Business Context

STP compliance is mandatory for all Australian employers and requires STP-enabled payroll software. Non-compliance can result in ATO penalties and increased scrutiny.

How Clever Ops Uses This

Clever Ops helps Australian businesses ensure their payroll systems are STP Phase 2 compliant, integrating with payroll software to automate reporting and reduce errors. We build workflows that verify data accuracy before transmission and maintain records for audit purposes.

Example Use Case

"A business with 50 employees processes fortnightly payroll through STP-enabled software that automatically reports wages, tax withholding, and super information to the ATO with each pay run."