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  • About Single Touch Payroll

    Single Touch Payroll (STP) is the way you report your employee's tax and super information to the ATO.

    STP is part of the Australian Government's commitment to streamlining employer reporting obligations. It was legislated on 16 September 2016 as part of the Budget Savings (Omnibus) Act 2016External Link.

    Employers with 20 or more employees were required to start reporting from 1 July 2018.

    Parliament passed further legislation to extend STP reporting to include employers with 19 or fewer employees from 1 July 2019 (The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018).

    How STP works

    Each time you pay your employees you will also be sending your employee salary and wage information, pay as you go (PAYG) withholding and super information to the ATO through an STP-enabled software or solution. These will be year-to-date amounts.

    We have provided detailed tables in this document outlining mandatory reporting under STP, voluntary reporting, and payments that are out of scope and cannot be reported through STP.

    What STP means for you

    Each time you run your payroll and pay your employees, you will also send us your STP data from your payroll software or solution. This will be done through a pay event.

    If you need to, you can make corrections to your employees' year-to-date (YTD) amounts in your next pay event, or through an update event. This is explained in Correcting a pay report.

    Employers with 19 or fewer employees

    For employers with 19 or fewer employees (small employers), there are a number of options available to report through STP.

    • If you already use payroll software you can report through this software if it is STP-enabled. Talk to your digital service provider to find out if your software is STP-enabled.
    • Choose a payroll software solution that offers STP reporting, if you do not currently have one.
    • Ask a registered tax or BAS agent or payroll service provider to report through STP on your behalf.

    See also:

    Transitioning to STP

    Your digital service provider will give you information to support you when you transition to STP reporting. They will let you know which of the following methods to use:

    • Provide an opening year-to-date balance for all employees (active, inactive and terminated) in an update event.
    • Report year-to-date balances for all employees (active, inactive and terminated) in your first pay event.
    • Report year-to-date amounts for employees through an STP pay event and year-to-date 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 year-to-date 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.
    • Start your STP reporting with zero year-to-date 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.

    Changing payroll solutions during a financial year

    If you start reporting through one STP solution and change to another during a financial year, you must transition correctly to make sure the information pre-filled into your employees' income tax return is accurate.

    There are three options to transition to a new payroll solution during a financial year:

    1. Migrate your year-to-date employee information to the new payroll solution. You will need to zero the employee year-to-date values from the old payroll solution through an update event to prevent duplicate information being displayed. If you can no longer access the software you used for STP reporting previously or you are unable to zero these values, you will need to phone us on 13 28 68.
    2. If you do not migrate year-to-date employee information to the new payroll solution you can start reporting your employee year-to-date amounts from zero. You will need to finalise the employee information reported under the original payroll solution.
    3. Migrate your year-to-date employee information to the new payroll solution and use the original business management software (BMS) identifier in future pay event reporting.

    Example: changing payroll solutions during a financial year

    Vandalay Industries decides to change its payroll solution as the business is growing. Vandalay Industries will start using the new payroll solution from 1 September 2020 and will be unable to transfer employee payroll data from the old payroll solution to the new one. Vandalay Industries needs to finalise the employee information in the last pay event submitted using the old payroll solution.

    At the end of the financial year, Vandalay Industries employees will have two sets of information from their employer pre-filled into their income tax return – one for the period 1 July 2020 to 31 August 2020 and another for the period 1 September 2020 to 30 June 2021.

    End of example

    Exemption for small employers with closely held payees

    Employers with 19 or fewer employees (small employers) are exempt from reporting their 'closely held payees' through STP-enabled software until 1 July 2021.

    This exemption applies automatically, and you don't need to tell us. However, you should keep records that support your decision.

    You can also choose to report your closely held payees sooner if it’s easier for you. If you are already reporting or are ready to start STP reporting, you can report closely held payees at the same time as any other employees (arm’s length employees).

    Eligibility for the closely held payee exemption

    This reporting exemption only applies to closely held payees of small employers. A closely held payee is one who is not at arm’s length – that is, someone who is directly related to the business, company or trust that pays them, such as:

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

    If you have any arm's length employees, they must be reported through STP on or before each payday, unless you are eligible for one of the quarterly reporting concessions. If you are eligible for one of these concessions, you may choose to voluntarily report your closely held payees on a quarterly basis.

    Notifying us of your closely held payees

    You do not need to apply to report your closely held payees quarterly.

    If you only have closely held payees, then you are not required to start STP reporting until 1 July 2021. There is no requirement for you to tell us that you only have closely held payees.

    Finalisation declaration due dates

    If you have 20 or more employees (substantial employer), you should be reporting closely held payees each pay day along with arms-length employees. The finalisation due date for closely held payees is 30 September 2020.

    For small employers who only have closely held payees and they are being reported through STP, the due date for end-of-year STP finalisation for the 2019–20 financial year, will be the payee's income tax return due date.

    Where an entity is not wholly closely held (has a mixture of both closely held payees and arms-length employees), the due date for end-of-year STP finalisation for closely held payees is 30 September 2020. All other employees were due 14 July 2020 if the employing entity is a substantial and 31 July 2020 if the entity is a small employer.

    For the 2021 financial year and onwards, the due date for small and substantial employers will be 14 July each year.

    Micro employers – one to four employees

    If you are a micro employer with four or fewer employees and you don't currently use payroll software, there are other ways to report STP information. Many digital service providers offer low-cost STP solutions for less than $10 per month.

    You can meet your STP obligations in one of the following ways:

    • Choose a low or no cost solution from our STP product registerExternal Link. When choosing an STP reporting solution, you need to consider which product best suits your business needs.
    • Apply for one of the quarterly reporting concessions, if eligible.
    • If you rely on your tax or BAS agent to lodge your activity statements, they may be able to report quarterly on your behalf. Talk to your registered agent to see if this is a service they can provide.

    See also:

    Quarterly reporting concessions

    There are some circumstances where employers can report quarterly through STP instead of each pay day.

    There are a number of concessional reporting options available to help you transition to STP. Eligibility for these differs and depends on your individual circumstances.

    Concessional reporting for micro employers

    If you are an employer with four or fewer employees (micro employer) and need more time and support to move to real-time pay day reporting, you can choose to report through your registered tax or BAS agent on a quarterly basis until 30 June 2021.

    Your registered agent will need to lodge the STP report on your behalf through an STP-enabled solution.

    Applications for this concession will be considered where there are exceptional circumstances affecting you.

    Eligibility

    To be eligible for this quarterly reporting concession, you must:

    • have between four or fewer employees on the day of application
    • lodge your activity statements electronically through a registered tax or BAS agent
    • have non-computerised payroll – this could include running your payroll manually and keeping records on a spreadsheet or paper
    • have any amounts owing to us subject to a payment plan or not yet due
    • have all your lodgment obligations up to date or subject to a deferral.

    Counting your employees

    To be eligible for the quarterly reporting concessions, you need to be considered a micro employer at the time of application and have four or fewer employees.

    Each of the following count as one employee:

    • full-time employees
    • part-time employees
    • casual employees
    • employees based overseas
    • any employee absent or on leave (paid or unpaid).

    Don't include the following in your headcount:

    • employees who have ceased working for you
    • independent contractors
    • staff provided by a third-party labour hire organisation
    • office holders
    • religious practitioners
    • closely held payees such family members of a family business, directors or shareholders of a company and beneficiaries of a trust.

    If you have a mixture of employees and closely held payees (such as family members or directors) which results in your numbers being greater than four, you are still considered a micro employer and eligible for the quarterly reporting concessions.

    If your application for this concession is accepted and your employee numbers increase, you are still eligible to report quarterly until 30 June 2021.

    Seasonal and intermittent employers quarterly concession

    Seasonal and intermittent employers are those who generally have either no or up to four employees for most of the year and then have an increase of employees for less than three months of a financial year. The three months do not need to be consecutive.

    Eligibility

    If you normally have:

    • no employees or between one and four employees and then employ 19 or fewer seasonal or short-term employees for a three-month period or less, you are eligible for this concession.
    • no employees or between one and four employees and then employ 20 or more seasonal or short-term employees for a three-month period or less, we will consider your application on a case-by-case basis.

    You must also meet both of the following:

    • all amounts owing to us are either not yet due or subject to a payment plan
    • all lodgment obligations are either not yet due or subject to a deferral.

    Applying for the concession

    You or your registered agent will need to apply for this concession. To apply using:

    • the Business Portal – select Manage employees then STP deferrals and exemptions
    • Online services for agents – select Business then STP deferrals and exemptions.

    How to lodge your quarterly STP report

    Your quarterly STP report needs to be lodged through an STP-enabled solution. You can either lodge the report yourself or have a registered agent do this on your behalf.

    Your report cannot be lodged through the Business Portal or Online services for agents. It is not an additional label on the activity statement.

    Payments included in the quarterly report

    The quarterly report needs to include your employees’ year-to-date amounts up to and including the last pay day of the quarter, your total gross wages and the total amount of PAYG withholding for the quarter. This would be the same amounts you would report at the W1 and W2 labels on your activity statement.

    You can lodge every pay event for the quarter individually or one pay event, which reports the information for the quarter.

    Speak to your digital service provider to see how they are offering quarterly reporting.

    Quarterly STP report due date

    If you report quarterly, you will need to send your STP pay event once per quarter at the same time you lodge your activity statement.

    Notifying us when you won’t pay employees again for the year

    If you will not be paying any employees for the rest of the financial year, you should lodge a 'No requirement to report' notification.

    To lodge using the Business Portal:

    • select Manage employees then STP deferrals and exemptions
    • select No requirement to report.

    Agriculture, fishing and forestry quarterly concession

    If you are a micro employer (four or fewer employees) in the agriculture, fishing or forestry industry and you need more time to move to real-time STP reporting, you can choose to report quarterly until 30 June 2021.

    Eligibility

    To be eligible for this quarterly reporting concession, you must:

    • be a micro employer on the day you apply
    • be in the agriculture, fishing or forestry industry.
    • have any amounts owing to us subject to a payment plan or not yet due
    • have all your lodgment obligations up to date or subject to a deferral.

    Applying for the concession

    You or your registered agent will need to apply for this concession. To apply using:

    • the Business Portal – select Manage employees then STP deferrals and exemptions
    • Online services for agents – select Business then STP deferrals and exemptions.

    How to lodge your quarterly STP report

    Your quarterly STP report needs to be lodged through an STP-enabled solution. You or your registered agent can lodge the report.

    Your report cannot be lodged through the Business Portal or Online services for agents. It is not an additional label on the activity statement.

    Payments included in the quarterly report

    The quarterly report needs to include your employees’ year-to-date amounts up to and including the last pay day of the quarter, your total gross wages and the total amount of PAYG withholding for the quarter. This would be the same amounts you would report at the W1 and W2 labels on your activity statement.

    You can lodge every pay event for the quarter individually or one pay event which reports the information for the quarter.

    Speak to your digital service provider to see how they are offering quarterly reporting.

    Quarterly STP report due date

    If you report quarterly, you will need to send your STP pay event once per quarter at the same time you lodge your activity statement.

    Not-for-profit, clubs and associations quarterly concession

    Not-for-profit club or associations (for example, school parent associations or local sporting clubs) who are micro employers (making payments to employees or volunteers) can choose to report quarterly until 30 June 2021.

    Eligibility

    To be eligible for this quarterly reporting concession, you must:

    • be a micro employer on the day you apply
    • be a not-for-profit club or association – for example, a school parent association, a school canteen or a local sporting club
    • have any amounts owing to us subject to a payment plan or not yet due
    • have all your lodgment obligations up to date or subject to a deferral.

    Applying for the concession

    You or your registered agent will need to apply for this concession. To apply using the Business Portal:

    • select Manage employees then STP deferrals and exemptions
    • Online services for agents – select Business then STP deferrals and exemptions.

    How to lodge your quarterly STP report

    Your quarterly STP report needs to be lodged through an STP-enabled solution. You or your registered agent can lodge the report.

    Your report cannot be lodged through the Business Portal or Online services for agents. It is not an additional label on the activity statement.

    Payments included in the quarterly report

    The quarterly report needs to include your employees’ year-to-date amounts up to and including the last pay day of the quarter, your total gross wages and the total amount of PAYG withholding for the quarter. This would be the same amounts you would report at the W1 and W2 labels on your activity statement.

    You can lodge every pay event for the quarter individually or one pay event which reports the information for the quarter.

    Speak to your digital service provider to see how they are offering quarterly reporting.

    Quarterly STP report due date

    If you report quarterly, you will need to send your STP pay event once per quarter at the same time you lodge your activity statement.

    Determine how you will report through STP

    You will need to determine how you will report through STP.

    • If you use payroll software, your digital service provider 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. If you use a payroll service provider they must be a registered agent to report to the ATO on your behalf. For more information, refer to the Tax Practitioners Board (TPB) Information sheet: TPB(I) 31/2016 Payroll service providersExternal Link.

    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. This includes checking that your employee information is accurate, including names, addresses and dates of birth.

    Check if you are addressing overpayments, calculating super and paying employees correctly.

    Determine how to send your report to 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 – either a check-box or similar option.

    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, 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, make sure the appropriate delegation is obtained. The person may need to be added as an authorised contact if they will be interacting with us about STP matters.

    If you are using a registered agent to lodge your STP reports on your behalf, you must authorise them so they are linked to your account as an STP intermediary. You will also need to provide your registered agent with written authorisation to lodge a pay event on your behalf before each submission.

    Lodgment methods

    Your digital service provider will let you know how your software will send your STP files to the ATO.

    They will let you know if you need to use myGovID and Relationship Authorisation Manager (RAM) to lodge your reports.

    Find out about:

    Last modified: 01 Oct 2020QC 54550