Single Touch Payroll

Single Touch Payroll (STP) is the Australian Taxation Office regime requiring employers to report payroll data to the ATO every pay event.

For global payroll teams, STP is the operational rhythm Australian payroll runs to. The ATO no longer accepts an annual payment summary; each pay run is a structured SBR XML lodgement, and the software either supports it natively or does not lodge at all.

STP Phase 2 expanded the payload from a flat wages-and-tax block to a structured employee profile lodged in full at every pay event. The schema is the work; the cadence is the easy part.

The trade-off the global vendor RFP almost always gets wrong is treating Australian coverage as "another country on the platform". A provider that handles UK PAYE cleanly may still route Australian filings through a partner bureau, and that handover is the most common drift point in the first reporting cycles.

What does Single Touch Payroll mean in practice?

In practice, STP is a pay-event regime, not a periodic return. Each pay run, the payroll system generates a structured Standard Business Reporting (SBR) XML message and lodges it with the ATO on or before the date employees are paid.

What lodges at each pay event

The lodgement carries the employer's ABN and branch code, plus payee-level data: gross wages, PAYG withholding, superannuation guarantee accrued (not yet contributed), allowances and deductions by category, and from Phase 2 onwards, child-support deductions reported separately.

The structured schema means every component of the pay run has to map to an STP Phase 2 field before it can lodge. Software that does not natively understand the schema either rejects the pay run or files a malformed lodgement the ATO rejects on the back end.

Concessions on the on-or-before-payday rule

Three concessions soften the rule. Closely-held payees (family members and directors of small private companies) can report quarterly.

Micro employers with four or fewer employees can request quarterly reporting through a registered agent. Seasonal employers have specific deferral grounds the ATO grants on application. None of the three exempts an arm's-length salary-and-wages payee on a standard global payroll.

The finalisation deadline at year-end

End-of-year sits separately. The finalisation declaration replaces the old payment summary annual report (PSAR).

It is due 14 July for arm's-length employees and 30 September for closely-held. Once finalised, year-to-date STP data populates each employee's myGov pre-fill at tax time.

What does STP Phase 2 force the payroll data model to carry?

Phase 2 turned STP from a tax-reporting feed into a full employee-profile feed. Every payee has to map to a structured set of fields at every pay event.

The 8-character tax treatment code replaces the TFN declaration form and tells the ATO which tax scale, Medicare levy reduction, and study-loan flag to apply. Build the lookup at onboarding, not at first pay run, because a missing or invalid code blocks the lodgement file.

See the gross-to-net payroll entry for the underlying calculation that STP reports against.

How does STP compare to other real-time payroll regimes?

STP looks superficially similar to the UK's PAYE Real Time Information (RTI), but the two regimes diverge on several operational points.

Multi-ABN reporting is the Australia-specific trap that catches new entrants. Each Australian Business Number reports separately, with its own STP channel, even where one payroll system holds the data.

Use an EOR-held ABN for the first three hires and register an own subsidiary ABN later, and the result is two STP streams that do not consolidate at the ATO end.

Superannuation timing is the other divergence worth flagging. STP reports the super guarantee accrued at each pay event, not the amount contributed; actual contributions move through the separate SuperStream channel by the quarterly due date (28 January, 28 April, 28 July, 28 October). The STP figure is evidence of liability, not evidence of payment.

What do buyers consistently get wrong?

The recurring mistakes cluster into four moves visible across STP implementation reviews.

The first is assuming a global platform lodges STP natively. Many global vendors route Australian filings through a third-party bureau, and the audit trail crosses two systems.

The hybrid model is the most common source of STP filing drift in the first six months because the handover hides a missing data field until lodgement rejects. Ask for written confirmation that the product lodges Phase 2 SBR XML directly to the ATO.

The second is reading the STP figure as evidence of super payment. STP reports the super guarantee accrued at each pay event; the actual contribution moves through SuperStream quarterly.

A clean STP record does not mean super has been paid, and a missed SuperStream contribution attracts its own super guarantee charge (SGC), more expensive than most buyers expect.

The third is leaving the tax treatment code to the first pay run. The 8-character code is mandatory under Phase 2 and replaces the TFN declaration form.

Build the lookup at onboarding and capture working-visa and residency status at the same point. A working-holiday-maker payee filed without a country code rejects at the ATO end.

The fourth is the multi-ABN consolidation trap. Two ABNs file two STP streams; the ATO does not merge them, and the employee may receive two pre-fill records at year-end.

Plan the ABN transition explicitly when moving from an EOR-held ABN to an own-entity ABN, with finalisation under the EOR ABN before the switch.

What does an EOR handle on STP filing?

An Australian-compliant EOR registers the ABN, runs STP Phase 2 native software, lodges SBR XML on or before each payday, and files the finalisation declaration. The client never appears on the ATO's STP register.

Confirm before signing that the EOR lodges directly to the ATO rather than through a third-party bureau. The APAC EOR shortlist ranks providers on STP-handling alongside Singapore, Hong Kong, and New Zealand coverage.

If Australia sits inside an own-entity payroll, the platforms that lodge Phase 2 SBR XML natively include Employment Hero, Xero, MYOB, KeyPay, and ADP Australia. The Australia country guide covers the super-guarantee mechanics and wider statutory picture STP sits inside.

Single Touch Payroll FAQs

Does an EOR handle STP filing in Australia?

Yes. An Australian-compliant EOR registers the ABN, runs STP Phase 2 native software, lodges SBR XML on or before each payday, and files the finalisation declaration by 14 July.

The client never appears on the ATO's STP register. Confirm before signing that the EOR lodges directly to the ATO rather than through a third-party bureau, since multi-handover filing is the most common drift point in the first reporting cycles.

What happens if a pay event STP file fails to lodge on time?

The ATO applies a failure-to-lodge penalty under Taxation Administration Act 1953 Schedule 1 Part 4-25. The base unit from July 2024 is A$330 per 28-day period per missed lodgement, scaled by entity size up to a five-unit cap.

Repeat failures escalate, and the ATO can issue a director penalty notice making directors personally liable for unpaid PAYG and super. Voluntary disclosure through the tax agent is the cleanest route after a miss.

Is STP the same as paying superannuation?

No. STP reports the super guarantee accrued at each pay event, but the actual contribution moves through the separate SuperStream channel and is due quarterly.

The quarterly dates are 28 January, 28 April, 28 July, and 28 October. A clean STP record does not mean super has been paid, and a missed SuperStream contribution attracts its own super guarantee charge (SGC), more expensive than most buyers expect.

Do small employers have to lodge STP every pay event?

Generally yes. Three concessions soften the rule.

Closely-held payees (family members and directors of small private companies) can report quarterly. Micro employers with four or fewer employees can request quarterly reporting through a registered agent. Seasonal employers have specific deferral grounds the ATO grants on application. None exempts an arm's-length salary-and-wages payee on a standard global payroll.

How does STP Phase 2 differ from the original STP?

Phase 2 expanded the payload from a flat wages-and-tax block to a structured employee profile.

Income type is now mandatory per payee (salary, working-holiday-maker, foreign, labour-hire, voluntary, closely-held). The 8-character tax treatment code replaces the TFN declaration form. Paid leave, lump sums, and child-support deductions break out by category. The schema is the work; the cadence is unchanged. See the EOR compliance entry for the full responsibility split on the international leg.