Single Touch Payroll, usually called STP, is the Australian system used by employers to report payroll information to the Australian Taxation Office through payroll software. It connects payroll processing with reporting so information such as salaries and wages, PAYG withholding and superannuation data can be reported as part of the pay-run process. For small employers, understanding STP is important because payroll errors can affect employee income statements, year-to-date balances and ATO reporting.
What Is Single Touch Payroll?
Single Touch Payroll is a government payroll reporting framework. Employers use STP-enabled payroll software to report employee payroll information to the ATO when they process payroll.
What Information Is Reported Through STP?
STP reporting can include employee salary and wage information, PAYG withholding and superannuation information. The exact fields depend on the payroll event and current STP reporting requirements.
Why STP Was Introduced
The system was designed to streamline employer payroll reporting and give the ATO more timely payroll information rather than relying only on annual reporting.
When Does STP Need to Be Reported?
For a regular pay cycle, STP reporting is generally required on or before payday, subject to any applicable concessions or special arrangements. Payday is linked to when employees are expected to receive payment.
Weekly Payroll
If employees are paid weekly, STP reporting forms part of the weekly payroll process.
Fortnightly Payroll
If employees are paid fortnightly, STP reporting is generally aligned with each fortnightly pay event.
Monthly Payroll
If employees are paid monthly, STP reporting is aligned with the monthly pay event.
Who Needs to Use STP?
STP applies broadly to Australian employers, including small employers, although special concessions or exemptions can apply in limited circumstances. Businesses should check current ATO guidance if they believe an exception applies.
What Is STP Phase 2?
STP Phase 2 expanded the payroll information reported through the system. It provides more detail about employee income types, allowances and other payroll components. Payroll software should be configured correctly so employee categories map to the required reporting fields.
Why Correct Payroll Categories Matter
If payroll categories are mapped incorrectly, the employee’s reported year-to-date information can be wrong. This is why payroll setup should be reviewed rather than relying only on default software settings.
How Payday Super Affects Payroll Reporting in 2026
Payday Super commenced from 1 July 2026. Employers now need payroll and superannuation processes that operate more closely together. Current ATO guidance also refers to reporting employee year-to-date qualifying earnings and super liability through STP each payday.
What Employers Should Review
- Payroll software configuration
- Employee superannuation details
- Qualifying earnings setup
- Super liability reporting
- SuperStream payment process
- Payroll reconciliation
Do Not Assume Old Quarterly Processes Still Apply
Payroll and superannuation processes changed from 1 July 2026. Employers using old workflows should review the current ATO guidance and their payroll software settings.
How Does STP Work in Payroll Software?
Most modern Australian payroll platforms include STP functionality. The general workflow is to process payroll, review the pay run, submit the STP event and retain payroll records.
Typical STP Pay-Run Process
- Confirm employee changes.
- Enter hours, leave and allowances.
- Process the pay run.
- Review totals and unusual changes.
- Submit the STP report through enabled software.
- Approve employee payments.
- Retain payroll records.
- Reconcile payroll in the accounting system.
What Should You Check Before Submitting STP?
- Employee names and identifiers
- Pay rates
- Hours worked
- Leave taken
- Allowances
- Deductions
- PAYG withholding
- Superannuation information
- Year-to-date balances
What Happens If You Make an STP Mistake?
Payroll errors can happen because of incorrect employee setup, wrong pay categories or missed adjustments. Most STP-enabled systems provide ways to correct payroll information, but the exact method depends on the type of error and payroll software.
Common STP Errors
- Incorrect employee tax details
- Wrong payroll category mapping
- Duplicate employee records
- Incorrect year-to-date balances
- Missed termination details
- Incorrect allowance reporting
Do Not Ignore Payroll Errors
Correct errors as soon as practical so employee records and year-to-date information remain reliable.
What Is STP Finalisation?
At the end of the financial year, employers complete STP finalisation to indicate that employee year-to-date payroll information is final. Employees can then access finalised income information through government services.
Before Finalising STP
- Reconcile gross wages.
- Reconcile PAYG withholding.
- Review superannuation records.
- Check employee year-to-date totals.
- Review termination payments.
- Resolve duplicate employee records.
- Confirm all pay events have been submitted.
How Does STP Affect Employees?
STP reporting helps update employee income information during the year. Employees can generally view reported income information through myGov-linked services rather than relying only on traditional annual payment summaries.
Does STP Replace Payroll Records?
No. STP is a reporting process. Employers still need complete payroll records, employee details, leave information, pay calculations and supporting documentation.
Does STP Replace BAS?
No. STP and BAS are related to different reporting processes. Payroll information can affect activity statement obligations, but submitting STP does not replace the need to lodge BAS where required.
For BAS reporting, see our BAS lodgement guide.
How Does STP Connect With Bookkeeping?
Payroll figures also appear in the accounting records. Wages, PAYG withholding, superannuation and payroll clearing accounts should be reconciled so the general ledger matches the payroll system.
Monthly Payroll Reconciliation Should Compare
- Payroll reports
- Bank payments
- Wage expense accounts
- PAYG withholding balances
- Superannuation balances
- Payroll clearing accounts
See our payroll reconciliation guide.
Can Xero Handle STP?
Xero’s Australian payroll functionality supports Single Touch Payroll reporting on relevant plans. Employers should still review employee setup, payroll categories and year-to-date balances before submission.
Can MYOB Handle STP?
MYOB provides Australian payroll products with STP functionality. Available features depend on the product and subscription.
What About QuickBooks?
Payroll availability and STP workflows can depend on the Australian product setup and connected payroll solution. Confirm current functionality before relying on a specific plan.
Common STP Mistakes Small Employers Make
Submitting Without Reviewing the Pay Run
Automation is useful, but payroll totals should still be checked before submission.
Using Incorrect Employee Categories
Incorrect categories can affect STP Phase 2 reporting.
Not Reconciling Payroll
STP can be submitted successfully while the accounting records still contain errors. Reconciliation is a separate control.
Leaving Duplicate Employees in the System
Duplicate payroll records can create confusing year-to-date information.
Waiting Until Year-End to Fix Problems
Monthly payroll reconciliation makes finalisation easier and reduces the chance of large corrections.
STP Checklist for Every Pay Run
- Review employee changes.
- Confirm timesheets and leave.
- Check pay rates and allowances.
- Review PAYG withholding.
- Review superannuation information.
- Check unusual variances.
- Submit the STP event.
- Record approval.
- Complete payment.
- Reconcile payroll regularly.
Quick answer
Single Touch Payroll is not just a year-end task. It is part of the regular payroll process, with employee payroll information reported through STP-enabled software around each payday.
Frequently Asked Questions
Do I need STP if I only have one employee?
STP generally applies broadly to employers, including small employers. Check current ATO rules if you believe a concession applies.
Is STP submitted before or after employees are paid?
For regular payroll, reporting is generally due on or before payday, subject to applicable arrangements.
Can I correct an STP report?
Yes, payroll software generally provides correction or update processes. The correct method depends on the error.
Does STP calculate payroll automatically?
No. STP reports payroll information. Payroll software performs calculations based on your setup.
Do employees still receive payment summaries?
STP has changed how employees access year-end income information, with information generally available through myGov-linked services after finalisation.
Related Guides
- Payroll Services Melbourne Guide
- Payroll Outsourcing Cost
- Payday Super 2026 Guide
- Bookkeeping Services Melbourne Guide
- ATO Single Touch Payroll Guidance
How to Prepare Payroll Software for STP and Payday Super
Because payroll reporting and superannuation processes now operate more closely together, employers should review software settings rather than assuming an old payroll configuration is still suitable. Confirm employee classifications, super details and year-to-date balances before relying on automated submissions.
Software Review Checklist
- Confirm every active employee is set up once.
- Review tax and payroll categories.
- Check super fund details.
- Review qualifying earnings settings.
- Confirm super liability reporting.
- Check leave balances.
- Review termination settings.
- Confirm STP submission permissions.
After changing software settings, compare the next pay run with the prior period and investigate unexpected differences before submission.
What Should Employers Keep as Evidence of Payroll Review?
A simple approval process can improve payroll control. Keep the pay-run summary, approval record, STP submission confirmation and reconciliation notes together. This creates a clear audit trail if an employee query or payroll correction arises later.
Businesses with multiple payroll approvers should document who prepares the pay run, who reviews it and who authorises payment. Separation of duties can reduce the risk of accidental or unauthorised changes.
Employers should also review payroll procedures whenever software, employee categories or superannuation processes change, because old settings can continue producing incorrect results.
Regular review also makes year-end finalisation easier and reduces the chance of large payroll corrections accumulating over several pay periods.
Review the process after every major payroll change.
Get Payroll and STP Support
TNS Accounting supports Melbourne businesses with payroll, bookkeeping, BAS preparation and payroll reconciliation. Contact TNS Accounting to discuss your payroll process and STP support needs.
