Single Touch Payroll Phase 2 employer reporting guidelines
These guidelines explain the requirements for Single Touch Payroll (STP) Phase 2 reporting using STP-enabled software.
In this document
Definition of terms
Single Touch Payroll (STP) is the way you report your employees' tax and super information to the ATO.
The following terms are used in these guidelines:
- Digital service provider (DSP) – those who develop or deliver digital services that help the community (and business) meet their tax and super obligations.
- Pay event – the file generated by an STP-enabled software or solution. This file must be lodged to us on, or before, the payment date when an employer makes a payment to an employee or payee that is subject to withholding.
- Update event – the service that allows an employer to transition to STP and correct or finalise STP data to us. This does not include employees that are paid payments subject to withholding (pay event).
- STP report or reporting – used for reporting either
- a pay event (upon payments subject to withholding), or
- an update event (upon transition, correction or finalisation).
- BMS ID – a business management software identifier that uniquely identifies the source of employee data sent to us as a specific instance of payroll software.
- Payee Payroll ID – a key identifier that represents each employee in the payroll that, in conjunction with payee details and the tax file number (TFN), enables us to uniquely identify the taxpayer.
- Income statement – the equivalent of an employer-issued payment summary. It contains the latest year to date (YTD) STP data reported by employers. It is available through ATO online services accessed through myGov. If an employee does not have a myGov account they can create a myGov account and link it to the ATO.
- Finalise – when an employer must make a declaration to us that they have provided all the information for each employee for a financial year. This is done by providing the finalisation indicator as a part of an employee’s STP report.
Expansion of STP (Phase 2)
Single Touch Payroll (STP) is part of the government's commitment to streamlining employer reporting obligations. STP was legislated on 16 September 2016 as part of the Budget Savings (Omnibus) Act 2016External Link.
Most employers are now reporting through STP. You will need to start reporting if you have not transitioned yet unless you have an exemption or a deferral.
In the 2019–20 Budget, the government announced that STP would be expanded to include additional information.
Including this additional information will:
- reduce the reporting burden for employers who need to report information about their employees to more than one government agency
- support the administration of the social security system.
The mandatory start date for STP Phase 2 reporting is 1 January 2022.
We are working with DSPs that are updating their solution to support Phase 2 reporting. Your DSP will let you know when your solution is ready.
Some DSPs, despite their best efforts, will need more time to get ready and transition their customers. They will advise you if we have approved a deferral for you to start reporting later than the mandatory start date.
If you can transition to STP Phase 2 reporting when your solution is ready then you do not need to ask us for more time, even after 1 January 2022.
If you need more time in addition to your DSP's deferral, you must apply. See STP expansion (Phase 2) delayed transitions.
How STP works
STP works by sending tax and super information from your STP-enabled payroll or accounting solution to us when you run your payroll.
This has not changed with Phase 2.
Your STP Phase 2 solution will send us a report with the information we need from you, such as:
- details of the remuneration you pay
- the type of income for the employee (such as salary and wages, or working holiday maker income)
- the components which make up the amounts (such as gross pay, paid leave, allowances or overtime)
- details of your pay as you go (PAYG) withholding
- the amounts you have withheld from payments you make
- information about how you calculated the amount, which you currently provide to us by sending a copy of the employee’s TFN declaration
- super liability information.
This guide provides information on:
These have not changed under Phase 2.
This guide explains rules about:
You can also make corrections to your employees' YTD amounts in your next pay event in the same financial year, or through an update event. See correcting information reported through STP.
How you send STP information to us depends on the solution you use.
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