Single Touch Payroll (STP) is Australia's digital reporting system where employers send each pay run's wages, tax, and super details straight to the Australian Taxation Office (ATO) in real time.
Imagine the perfect payroll system that has all the data your employees, you, and ATO needs, making finalization a breeze at the end of the year. Wouldn't that be great? That's exactly what STP does! But it's a double-edged sword. Miss on lodgements and you could get hefty fines and a mighty headache. Lucky for you, Pebl can help you navigate through it.
From the ATO's perspective, STP turns payroll into a live data feed. Every payday, your software transmits gross earnings, PAYG withholding, and super guarantee obligations. That information lands instantly in each worker's myGov account and in the tax authority's ledgers.
The program began in July 2018 for firms with 20 or more staff and now applies to every Australian employer, even those with a single casual. Phase 2, launched in 2022, widened the data fields to capture paid leave, allowances, and income types, trimming the need for separate forms like Tax File Number (TFN) declarations.
For global companies, STP offers a glimpse of where payroll compliance is heading. Real-time submission shrinks year-end bottlenecks, lifts transparency for mobile talent, and gives tax offices clearer insight into cross-border work arrangements. Pebl's global payroll service connects to ATO-approved gateways, letting you stay focused on people, not paper.
Why STP matters for employers in Australia
STP does not feel like another reporting chore. Instead, it turns each pay run into a live broadcast that goes directly to the ATO and each employee.
That immediate data flow improves accuracy since errors surface while the payroll file is still fresh. Workers open myGov and see their wages, tax, and super in near real time. Trust grows when the numbers match what lands in bank accounts.
Annual payment summaries once clogged the HR calendar with printing, folding, and follow-up calls. STP clears that backlog because the ATO already holds each figure. Finalization drops to a quick confirmation step at year's end.
Real-time reporting also shrinks compliance risks. The ATO flags late lodgements or mismatched totals within days, not quarters. Employers fix issues early and avoid penalties that could derail a growth plan.
Who is required to use STP?
Every employer in Australia needs to lodge Single Touch Payroll. That includes family-run cafes, tech start-ups, and any outfit that pays a single casual on the weekend. Size stopped mattering after 2019, when an expansion swept small businesses into the net.
The rule also encompasses global companies that set up an Australian entity or place staff on local contracts. If your headquarters sits in London but you run payroll from Melbourne, STP applies the moment you hit "pay." Local employees expect their data to flow to myGov, and the ATO expects the feed on schedule. Failing to file triggers ATO penalties that stack by the day. Late lodgement notices are quick to arrive, and repeated delays can result in audits or fines.
Key features of STP
Single Touch Payroll is more than a digital checkbox. It reshapes how employers share pay information with the ATO and their teams. The highlights:
- Real-time reporting. Every pay run transmits gross wages, PAYG withholding, and super contributions directly to the ATO, creating an up-to-date ledger for both employer and employee.
- Integration with payroll software. Lodgement rides through ATO-approved enterprise payroll platforms. Once connected, submissions leave the system automatically, so HR avoids duplicate data entries.
- STP Phase 2 expansion. Phase 2 added fields for employment basis, income types, and paid leave. The more complete data removes the need for separate forms like TFN declarations and allows smoother government reporting.
- Automatic employee visibility. Staff see their year-to-date figures in myGov after each cycle. That transparency helps workers track super entitlements and spot discrepancies early.
- Simplified year-end finalization. Because the ATO already holds the numbers, employers only need to confirm them at the end of the financial year. Traditional payment summaries become obsolete, saving time and postage.
How global employers can comply with STP
Hiring one person in Sydney triggers the same rulebook as running a full team. Single Touch Payroll sends each pay run directly to the ATO, so global employers must prepare the feed from day one.
An STP-enabled payroll platform or an Employer of Record (EOR) handles the technical link. The software builds the file and lodges it on time. That lifts pressure from in-house teams who prefer building culture to wrangling XML files.
If you operate an Australian entity, confirm that Phase 2 fields are active before the next cycle. They cover employment basis, paid leave codes, and tax treatments that the ATO now tracks. Upgrading the platform keeps the data clean and the tax office quiet.
Companies without a local branch can lean on a partner like Pebl. The EOR acts as the legal employer, runs payroll, and files STP on schedule. This route unlocks Australian hiring while shielding the parent firm from late fees.
Benefits of STP for employers
STP does its best work in the background. It trims clutter from payroll desks and delivers cleaner data to every stakeholder.
- Reduces manual year-end reporting. The ATO already holds each pay event, so the yearly rush to print payment summaries disappears. Employers tick a finalization box and get their attention back to what really matters.
- Helps avoid tax and superannuation errors. Every file lands in the ATO ledger within minutes. Teams catch mismatches while figures are fresh, keeping super payments and PAYG withholding on point.
- Builds employee trust through payroll transparency. Workers open myGov after payday and see wages, tax, and super in near real time. Clear numbers strengthen confidence in both the employer and the system.
- Streamlines processes by integrating payroll and reporting. STP-enabled software pushes data the moment payroll closes. HR enters figures once and skips double-handling.
- Pre-fills BAS and other government forms. The ATO uses STP data to auto-populate W1 and W2 fields on Business Activity Statements. Less manual entry means fewer keying mistakes and faster lodgement.
- Supports Services Australia claims. Agencies pull STP records when they assess income for benefits. Staff no longer need to chase old payslips during critical life events.
Implementation and best practices
Rolling out Single Touch Payroll does not demand a complete payroll overhaul. A few deliberate steps keep your data clean and the ATO satisfied.
- Choose certified payroll software. Pick a platform on the ATO's approved list so each pay event lodges in the correct format. Certified tools handle Phase 2 fields automatically and avoid last-minute patches that break under deadlines.
- Validate employee and super fund details. Before your first lodgement, confirm Tax File Numbers, super fund USIs, and personal data against official documents. Clean inputs prevent errors and reduce failure-to-lodge notices.
- Keep airtight records. Store pay reports, error logs, and correspondence for the five-year window the ATO can audit. A tidy audit trail speeds any review and shows regulators you run a disciplined payroll shop.
- Conduct routine STP audits. Schedule quarterly reviews of lodged pay events against bank statements and employee payslips. Catching minor mismatches early prevents surprises at year-end and keeps your feed aligned.
Before you move on, plan regular check-ins with your payroll team or provider. A brief monthly sync can flag software updates, data changes, or new ATO guidelines before they cascade into payday drama.
Make payroll pleasant with Pebl
Just paying your employees isn't enough. Just like you, they crave a smooth, seamless experience when it comes to finances. They want to know what they're owed, when they're getting it, and they want the most up-to-date information when it comes to withholding and tax liabilities.
STP is a forward-looking payroll system, and Pebl is right there with it.
In addition to fully supporting STP in Australia, our Global Payroll services offer similar benefits in 185+ countries worldwide but with an AI-supercharge that allows us to spot discrepancies before they become an issue.
When you use our Employer of Record service, Pebl becomes the legal employer of your talent. That means we handle payroll, visa sponsorship, onboarding, benefits, compliance, and everything else.
When you're ready to supercharge your payroll in Australia or in any of the 185+ countries worldwide, get in touch with us.
Disclaimer: This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided "as is," and no representations are made that the content is error-free.
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