Single Touch Payroll (STP)
Single Touch Payroll
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."