What is Single Touch Payroll (STP?)

STP is a way of reporting your employee salaries, wages, PAYG withholdings and superannuation to the ATO. Businesses used to report this information to the ATO once a year, now you need to send a report after each pay day. STP works by sending tax and super information from your STP-enabled payroll or accounting software to the ATO as you run your payroll.

Legislation passed in Australia mean all businesses will have to start reporting employee salaries, wages, PAYG withholdings and super to the ATO.

Changes to when you report payroll

You will now be updating the ATO on a pay-by-pay basis which means you won’t need to prepare a payment summary annual report anymore. You’ll just let the ATO know when you’ve made your last pay run of the financial year for your employees.

You also won’t need to send payment summaries to employees anymore, the ATO will use Single Touch Payroll reports as the sole record/wages paid, taxes collected, and superannuation contributed.

You’ll need to report payroll online, so there’ll be no more paper forms for reporting your payroll activity to the ATO. You’ll submit the information online using a specific format called SBR (Standard Business Reporting).

STP software

Having an online payroll software will make implementing STP much easier. As always, we recommend using Xero accounting software and we’re here to help you manage the initial setup and understanding how the software can benefit you long-term.