Single Touch Payroll (STP) is the ATO's real-time payroll reporting framework. Every time an employer runs payroll, their software reports gross wages, PAYG withholding, and superannuation contributions directly to the ATO at the time of payment.
STP Phase 2
STP Phase 2 (mandatory from 1 January 2022, with deferrals for some software providers) expanded the data set reported at each pay event. Employers now disaggregate gross income into specific income types (salary and wages, closely held payee amounts, working holiday maker income, and others), and report additional details including country codes, child support deductions, lump sums and termination payments.
Key Phase 2 additions
- Disaggregated gross — income type, country of residence, tax treatment code.
- Child support deductions and garnishees reported in real time.
- Lump sum E (back-pay for prior years) reported in the pay event rather than on a payment summary.
- Termination reason codes to help Centrelink assess entitlements.
End-of-year obligations
End-of-year payment summaries (group certificates) are no longer issued to employees. Instead, the ATO pre-fills individual tax returns from STP data, and employees view income statements in myGov. Employers must make a finalisation declaration in their STP software by 14 July each year (or later for closely held payees).
All employers, regardless of headcount, must report through STP. Micro employers (1–4 employees) had transitional options to report quarterly through a registered tax or BAS agent, but those concessions have largely wound down.