Single Touch Payroll
Reporting salary, withholding and superannuation to the ATO each time employees are paid.
Workflow
- 01Pay Run Finalised
- 02Pay Event Assembled
- 03ATO Lodgement
- 04Response Handling
- 05EOFY Finalisation
Data in and out
- OUT STP event to ATO · on or before each pay dayWithout it: Reporting obligation missed; penalties and employee income statements wrong.
If you change this
It implies 11 topics across 2 modules, including Financial Accounting which you might not expect.
See the path ahead →Why it matters
Under STP the ATO sees what an employer pays as it happens, and employees see it in their income statement. There is no longer a year-end window in which to quietly correct things.
- It is per pay run: On or before pay day, not at year end.
- It is visible to employees: Income statements populate from what was reported, so an error becomes a question from staff.
- It is cumulative: Each submission reports year-to-date figures, so a correction restates rather than appends.
The workflow
- 01
Pay run completion
The pay run is finalised and net pay released.
- 02
Event construction
A pay event is assembled — employee year-to-date gross, tax withheld, super liability, and the disaggregated components.
- 03
Submission
The event is lodged through a compliant channel, on or before pay day.
- 04
Acknowledgement
The ATO response is checked, not assumed.
- 05
Correction
Errors are fixed by restating year-to-date figures in the next event, or with an update event.
- 06
Finalisation
Year-end finalisation declaration marks the data as complete for income statements.
An unacknowledged submission is an unlodged one. The failure mode is silent: the pay run worked, people were paid, and nothing tells the payroll team the event never landed.
What you need in place
- Disaggregated reporting: STP Phase 2 requires gross to be broken into components — bonuses, allowances, overtime, paid leave — rather than a single figure.
- Employment and income type coding: Each employee classified correctly, which affects how the ATO treats their income.
- A compliant channel: Through the payroll system or an intermediary.
- Acknowledgement monitoring: Someone checking that each event was accepted.
- A correction process: Understood before it is needed, because the first correction always happens under time pressure.
Questions to ask
01Phase 2
Are we reporting disaggregated gross, or still a single figure?
Phase 2 is not optional and the component split has to match how pay codes are configured.
02Acknowledgements
Who confirms each event was accepted?
If the answer is nobody, assume some were not.
03Corrections
How do we restate a prior period?
Year-to-date restatement, not an adjusting entry. Know which before you need it.
04Terminations
Does a final pay report correctly, including the reason code?
Termination reporting drives what the employee can claim and when.
05Closely held payees
Do we have any, and are they reported on the right cycle?
Concessional reporting exists but has to be elected deliberately.
Metrics and KPIs to track
On-time lodgement rate
Pay events lodged on or before pay day.
Acknowledgement failures
Events rejected or unacknowledged, by cause.
Correction events
Update events per period, a measure of first-time accuracy.
Finalisation timeliness
Days from year end to finalisation declaration.
Alongside this