STP Checklist Generator

Single Touch Payroll Phase 2: What Australian Employers Must Report Every Pay Event

Single Touch Payroll (STP) requires all Australian employers to report payroll information — salaries and wages, PAYG withholding, and superannuation — to the ATO digitally on or before each pay day. STP Phase 2, mandatory for most employers from 1 January 2022, significantly expanded these requirements. Where Phase 1 reported a single gross wages figure, Phase 2 requires disaggregated income types, itemised allowances, and additional employee and payment details. If your payroll software was not updated for Phase 2, or if your payroll setup was not reviewed at the time of transition, there is a real risk that you are reporting incorrect data to the ATO every pay run.

The most common Phase 2 compliance errors seen in Australian businesses are: allowances still being reported as a lump sum (they must be broken out by type — travel, tools, car, laundry, overtime meal, etc.); income types not being assigned at the employee level (salary/wages must be coded SAW, closely held payees as CHP, working holiday makers as WHM); and termination payments not including the correct reason code. These errors do not just create an ATO compliance risk — they can cause employees' income statements to be incorrect, affecting their tax return and potentially creating Fair Work issues if termination entitlements are miscoded.

The EOFY finalisation declaration, due by 14 July, is the most consequential STP obligation. It tells the ATO and your employees that the year's payroll data is final and correct. Employees cannot complete their individual tax returns until the finalisation is marked, and the ATO uses the data to pre-fill their returns. Before submitting, you must reconcile PAYG withholding reported through STP against BAS lodgements for the year, and reconcile superannuation reported through STP against actual fund payments. Discrepancies at this stage require amendment reports — which are more complex to lodge than the original submissions.

How to use this STP checklist generator

1. Select the sections relevant to your business: initial Phase 2 setup, per-pay-run obligations, EOFY finalisation, and ongoing compliance.
2. Review the pre-populated tasks for each section, customise any items specific to your payroll setup (e.g., closely held payees, working holiday makers, salary sacrifice arrangements).
3. Assign tasks to responsible team members with due dates aligned to your payroll calendar and EOFY deadlines.
4. Download the checklist as a PDF to use as a recurring payroll process document or share with your payroll provider or accountant.

What must be reported in each STP pay event?

Each STP submission must include: year-to-date gross wages disaggregated by income type; year-to-date PAYG withholding; year-to-date superannuation liability (both ordinary time earnings super and any additional salary-sacrificed amounts); allowances itemised by type; reportable fringe benefits amounts where applicable; and employee tax file number (TFN) declarations. The year-to-date reporting model means that if a previous submission contained an error, the current submission's YTD figures will reflect the correction automatically — but material errors may still require an amendment.

What is the STP finalisation deadline and what happens if I miss it?

The finalisation declaration must be lodged by 14 July for most employers. If you have only closely held payees, the deadline is 31 July. Missing the deadline means employees cannot access a finalised income statement in myGov — they will see a "not tax ready" indicator, and their tax agent cannot pre-fill their return from ATO data. The ATO can apply penalties for late finalisation, though they generally apply a compliance approach for first-time or inadvertent delays. If you realise you have missed the deadline, lodge as soon as possible and contact the ATO if there is a business reason for the delay.

How do I correct an STP error after it has been submitted?

For errors in pay event data (wrong gross wages, incorrect withholding, missing allowances), the correction is generally made in the next regular pay run by adjusting the year-to-date figures — the STP model is YTD-based, so the correction flows through automatically. For errors in the finalisation declaration, you must submit an updated event (an amendment) through your payroll software. For errors that affect multiple employees or involve material misstatements, contact the ATO or work with your accountant to ensure the correct amendment process is followed.

Do I still need to give employees payment summaries?

No. Under STP, payment summaries (group certificates) have been replaced by income statements, which employees access through myGov or the ATO app. Once you submit the finalisation declaration, employees' income statements are marked "tax ready" and they can use them to lodge their tax return. You are not required to provide a paper payment summary. However, if an employee does not have access to myGov (e.g., they do not have a myGov account), you should help them set one up or provide the information in another form — the ATO has guidance on this.