How STP works
STP works by sending tax and super information from your STP-enabled payroll or accounting software to us when you pay your employees.
This includes the information we need from you, such as:
- salaries and wages
- pay as you go (PAYG) withholding
- super liability information.
See the detailed tables outlining mandatory reporting, voluntary reporting, and payments that are out of scope and cannot be reported through STP.
There are rules about what is reported in each pay event. You can also make corrections to your employees' YTD amounts in your next pay event, or through an update event. This is explained in Correcting a pay report.
How you send STP information to us depends on the software you use.
Transitioning to STP-enabled software
Your digital service provider (DSP) will support your transition to STP reporting. They will let you know which method best suits your payroll software or solution:
- Provide an opening year-to-date (YTD) balance for all employees (active, inactive and terminated) in an update event.
- Report (YTD) balances for all employees (active, inactive and terminated) in your first pay event.
- Report (YTD) amounts for employees through an STP pay event and YTD amounts for inactive and terminated employees in a later update event that must be lodged by 14 July, or the deferred due date.
- Report the current (YTD) balances for the employees included in your first pay event. Give payment summaries to terminated and inactive employees and lodge a PAYG payment summary annual report to cover the payments you made before your first STP pay event (only when transitioning to STP for the first time).
- Start your STP reporting with zero (YTD) balances and give payment summaries to all of your employees (current, inactive and terminated). Lodge a PAYG payment summary annual report for payments you made before your first STP pay event (only when transitioning to STP for the first time).
Determine how you will report through STP
If you haven't already started reporting, you will need to determine how you will report through STP:
- If you use payroll software, your DSP will let you know how they offer STP reporting.
- You can choose a payroll solution that offers STP reporting if you don't currently have one, or if your current payroll solution will not be STP-enabled.
- You can ask a registered tax or BAS agent to report through STP for you.
- You can use a payroll service provider to report for you – they must be a registered agent to lodge on your behalf.
Review your business processes and data
Before you start reporting through STP, you should review your current payroll processes.
Clean up any anomalies, in particular errors which may be detected through current processes such as issuing payment summaries or a payment summary annual report at the end of the financial year.
You should also check that:
- your employees' information is accurate, including their names, addresses and dates of birth
- you are addressing overpayments, calculating super and paying employees correctly.
Determine who will send your report to the ATO
The STP pay event file is an approved form. That means we require an authorised person to declare the information being submitted is true and correct. This declaration must be made by the person submitting the pay event file.
You will need to declare the STP data you are reporting is true and correct each time you submit a pay event or an update event. There will be a declaration in your STP-enabled software to do this.
You must have a standard process in place to verify your data is true and correct. This is a similar process to the assurance you may currently run to reconcile your bank file before you pay your employees.
While you must ensure you report accurate data at the time of your payroll event, you can make corrections in your next STP report.
Authorisations and declarations
Make sure you have internal authorisations in place before you lodge your first STP report.
Where this person is not the public officer, you need to make sure the appropriate delegation is in place. The person may need to be added as an authorised contact in Online services for business or Online services for agents if they will be interacting with us about STP matters.
If you are using a registered tax or BAS agent to lodge your STP reports on your behalf, you must authorise them so that they are linked to your account as an STP intermediary. You will also need to provide your registered tax or BAS agent with written authorisation to lodge a pay event on your behalf before each submission.
Your DSP will let you know how your software will send your STP files to the ATO.
They will also let you know if you need to use to lodge your reports.
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