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  • About Single Touch Payroll

    Single Touch Payroll (STP) reporting is currently available through most payroll, accounting and business management software.

    A number of No-cost and low-cost Single Touch Payroll solutions (less than $10 per month) are available for micro employers (those with four or less employees).

    Some providers have asked us for a later start date (a deferral) for their employer clients to report through STP. If you're not sure whether your software has a deferral, check with your provider.

    On this page:

    How STP works

    STP works by sending tax and super information from your payroll or accounting software to the ATO as you run your payroll.

    When you start reporting:

    • you will run your payroll, pay your employees as normal, and give them a payslip 
      • your pay cycle does not need to change (you can continue to pay your employees weekly, fortnightly or monthly)
       
    • your STP-enabled payroll software will send us a report which includes the information we need from you, such as salaries and wages, pay as you go (PAYG) withholding and super information   

    You will be reporting super liability information through STP for the first time. Super funds will also be reporting to us. They'll let us know when you make the payment to your employees' chosen or default fund. This is an important step toward making sure employees are paid their correct entitlements.

    The way STP information is sent will depend on the software you use. STP reporting will be offered in one of the following ways with:

    • an end-to-end solution, which allows you to run your payroll and send the STP information directly to us from your software
    • a solution which allows you to run your payroll and send the STP information through a third party sending service provider (SSP) which is integrated into your software
    • a solution that allows you to run your payroll and requires you to send the STP information through a third party sending service provider (SSP) outside your software.

    ATO systems will match the STP information to our employer and employee records.

    Your employees will be able to see their year-to-date tax and super information in ATO online services, which can only be accessed through myGov. Their data is updated every time you report (each pay day for most employers). Without STP reporting, employee data is only reported at the end of the financial year.

    If you make mistakes in your STP report, you can correct it in your following report. We won't penalise you for making mistakes you correct.

    At the end of the financial year, you'll need to finalise your STP data. This is a declaration to the Commissioner of Taxation to state you have completed your reporting for the financial year.

    You will no longer have to give your employees a payment summary for the information you've reported and finalised through STP. Once you finalise your data, your employees or their registered agent will be able to lodge their income tax return using the STP information available in ATO online services.

    You will no longer need to provide us with a payment summary annual report (PSAR) at the end of the financial year for the payments you report through STP.

    From 2020 we will pre-fill activity statement labels W1 and W2 for small and medium withholders with the information you report to us through STP. If you currently lodge an activity statement you will continue to do so.

    See also:

    What you need to know

    Employers with 1–4 employees (micro employers)

    If you have four or less employees (micro employer) and you don't currently use payroll software, there will be other ways to report STP information.

    We have asked software developers to build no-cost and low-cost STP solutions for micro employers – including simple payroll software, mobile phone apps and portals.

    We have published a list of the companies that currently have solutions available and those that intend to offer no-cost and low-cost solutions.

    You will also have the option for your registered tax or BAS agent to report your STP information quarterly, rather than each time you run payroll. This option will be available until 30 June 2021.

    Employers with 5–19 employees (small employers)

    Parliament has passed legislation to extend STP to include all employers from 1 July 2019.

    This will be a gradual start, and not all employers will start reporting at the same time.

    Determine when you need to start reporting from one of the following options:

    Start reporting now – If you use payroll software which offers STP, you can update your product and start reporting any time. Talk to your software provider, or visit their website, to find out what you need to do. See our checklist for some important steps you need to take to connect your software to the ATO.

    Start reporting any time before 30 September 2019 – See How to report to find out about STP solutions.

    Apply for more time to get ready – If you won't be ready to start reporting by 30 September 2019, use our online form to apply for a deferred start date. See Single Touch Payroll deferrals.

    Ask us for an exemption if you meet the criteria – If you live in an area with intermittent or no internet connection, you or your agent can apply online for an exemption.

    Employers with 20 or more employees

    Single Touch Payroll started from 1 July 2018 for employers with 20 or more employees.

    You should either be reporting through STP, or have a deferral in place (a later start date).

    If you're not sure if STP applied to you during the 2018–19 financial year, you can do a headcount (not a full time equivalent) to check if you had 20 or more employees.

    If you have not started reporting through STP, we have information to help you get ready. If you need more time, you should apply for a deferral.

    Find out if your software is STP-ready by talking to your software provider. Your tax professional can also help.

    Employers with closely held payees

    A closely held payee means the payee is directly related to the entity from which they receive payments, for example:

    • family members of a family-owned business
    • directors or shareholders of a company
    • trustees or beneficiaries of a trust.

    Employers may not always pay closely held payees a regular salary or wage. Instead, they may draw on income from the business throughout the year. As STP information is reported each time payroll is run, employers will not be able to report their closely held payees this way.

    If you're an employer with closely held payees, there are flexible reporting options available to you.

    See also:

    How to report

    You can send STP data to us in one of the following ways.

    Option one: Report through existing payroll or accounting solution

    You can report from your existing payroll or accounting software if STP reporting is available.

    Next steps:

    Option two: Choose STP enabled payroll software

    You may need to choose payroll software if you do not currently use it or your current software provider is not offering an STP-enabled product.

    Some providers are not updating their older products, such as those purchased off-the-shelf.

    If you have four or less employees, and you do not need payroll software, you can use an alternate solution (see option four).

    Next steps:

    • Review the Find STP softwareExternal Link – STP product register.
    • Talk to your registered tax or BAS agent to find out which payroll software product would best suit your business needs.

    Option three: Ask a third party to report on your behalf

    You can ask a third party, such as a registered agent or payroll service provider, to report on your behalf.

    It is your obligation as an employer to make sure they will be reporting through STP.

    If you use a registered tax or BAS agent, talk to them about your options. They may be able to report through STP for you, or work with you to outsource your payroll to a payroll service provider.

    Payroll service providers must be registered as a tax or BAS agent when providing a tax agent service or BAS service for a fee. This would include Single Touch Payroll.

    Option four: Choose an alternate solution once it is available (for employers with less than four employees)

    We have asked software developers to build No-cost and low-cost Single Touch Payroll solutions at or below $10 per month for employers with less than four employees.

    Last modified: 01 Jul 2019QC 54702