Single Touch Payroll (STP) is a government-mandated reporting system in Australia that requires employers to report employee payroll information to the Australian Taxation Office (ATO) every time they process a pay run. Introduced in 2018, STP was designed to increase transparency, streamline payroll compliance, and reduce the reporting burden for businesses.
Instead of submitting reports monthly or annually, employers now send payroll data—such as gross wages, PAYG withholding, and superannuation contributions—to the ATO in real time through STP-enabled software.
When an employer processes payroll using STP-enabled software, the system automatically sends a report to the ATO containing:
This transmission occurs at the same time the pay run is finalised—hence the name “Single Touch”. The ATO uses this information to update each employee’s myGov account and to streamline tax and super reporting.
STP has evolved through two major phases:
Employers must use STP Phase 2-compliant software to meet current reporting standards.
STP is compulsory for all employers in Australia, regardless of business size. This includes:
Failure to comply with STP requirements can result in ATO penalties, especially for repeated or intentional breaches.
With STP, employers no longer issue traditional PAYG Payment Summaries. Instead, they must finalise payroll data through an STP end-of-year declaration. This lets the ATO and employees know the data is complete and tax-ready. Once finalised, employees can lodge their tax returns without needing a paper summary.
To comply with STP, employers must use STP-enabled payroll software that can:
Platforms like Microkeeper automate this process, making compliance effortless for businesses of all sizes.
Explore Microkeeper’s STP-Compliant Payroll Software
If you report incorrect information through STP, the ATO allows corrections in the next pay event or through an update event. It’s important to fix mistakes promptly to ensure employee income statements remain accurate.
Ensuring your payroll system is up to date and award-compliant can significantly reduce these errors.
Only if they are treated as employees for PAYG purposes. True independent contractors paid via invoice are not reported through STP.
No. STP reporting must be electronic and via compliant software.
The ATO may issue penalties for non-compliance, especially if the failure is ongoing or intentional.
Single Touch Payroll is one of the most significant shifts in Australian payroll reporting. While it introduces new compliance responsibilities, STP also provides benefits in terms of accuracy, transparency, and efficiency. By using a trusted, STP-compliant payroll platform like Microkeeper, you can simplify your reporting process, stay compliant with the ATO, and focus more on your core business operations.
Disclaimer: This content is for general informational purposes only and does not constitute legal or financial advice. For specific payroll obligations or questions, consult the Australian Taxation Office or a qualified accountant.