STP is mandatory for virtually all employers. Each time you run payroll you send the ATO a pay event — gross wages, PAYG withholding and super information — directly from your payroll software, on or before each pay day.
Phase 2 (from 1 January 2022) expands what's reported. Gross is "disaggregated" into components — bonuses, overtime, allowances, directors' fees and paid leave — plus employment and income type and cessation reasons on termination.
Finalisation replaced payment summaries. Instead of issuing group certificates, you make an end-of-year finalisation declaration and employees see an income statement in myGov.
What STP is and who must report
Single Touch Payroll (STP) is the ATO's real-time payroll reporting system. Rather than sending a summary once a year, you report each pay day from STP-enabled payroll software, so the ATO receives your payroll figures as you run pay.
Reporting is near-universal: essentially all employers report through STP. You send the report on or before each pay day — the same rhythm as your normal pay cycle, whether that's weekly, fortnightly or monthly.
Because the report comes straight from your software, there's no separate form to lodge. Setting up STP is really about making sure your payroll software is STP-enabled and your employees, pay categories and codes are mapped correctly.
STP is a by-product of running pay, not an extra task. Once your software is connected to the ATO and your codes are mapped, the pay event is generated and lodged as part of finalising each pay run.
What you report each pay event
Each pay event reports, per employee, the figures the ATO needs to keep their pre-fill and your withholding obligations up to date. Broadly, a pay event includes:
- Year-to-date (YTD) gross — the employee's gross earnings for the year so far
- PAYG withheld — the tax you've withheld from their pay
- Super liability — the super guarantee you're liable to pay for the period
Figures are reported as year-to-date amounts, not per-pay increments, so each pay event is a fresh, cumulative snapshot per employee. That's what lets the ATO reconstruct an income statement without a separate end-of-year summary.
What Phase 2 changed
STP Phase 2 started on 1 January 2022. It doesn't change how often you report or how you lodge — it expands what you send in each pay event. The headline change is the disaggregation of gross: instead of a single "gross" figure, you report the components separately.
- Overtime — reported separately from ordinary earnings
- Bonuses & commissions — as their own category
- Directors' fees — separately identified
- Paid leave — broken out by leave type
- Allowances — itemised by allowance type
- Salary sacrifice — reported as its own amount
Phase 2 also adds several new data points to each employee's record:
- Employment basis — full-time, part-time or casual
- Income type and country codes — the type of income being paid, with a country code where relevant
- Cessation reason — the reason an employee's employment ended, reported on termination
- Child support — deductions or garnishees can be reported through STP (optional)
- Lump sums — reported with the correct lump sum categories
Phase 2 did not change the due date or the way you lodge. You still report on or before each pay day, from your STP-enabled software — the same pay-day rhythm as before. What changed is the level of detail in each report, not its timing.
Finalisation at year end
At the end of the financial year you make an STP finalisation declaration. This tells the ATO the year's data is complete for each employee and marks their income statement as "Tax ready" in myGov, so they can lodge their tax return.
The finalisation declaration is due by 14 July each year. Because the ATO already holds the reported figures, this is a declaration rather than a fresh upload of numbers.
STP finalisation replaced payment summaries (group certificates). For amounts reported through STP, you no longer issue payment summaries and don't lodge a payment summary annual report — employees access an income statement through myGov instead.
Employees who once received a paper group certificate now find their income statement in myGov. It's best to check it's marked "Tax ready" before lodging — that's the signal that you've finalised the year's STP data.
Quick answers
Is STP mandatory?
Yes — essentially all employers report through STP. Each pay day you send the ATO a pay event (gross, PAYG withheld and super) directly from STP-enabled payroll software.
What changed in Phase 2?
Disaggregated gross (overtime, bonuses and commissions, directors' fees, paid leave, allowances, salary sacrifice), plus employment basis, income type and cessation reason. Reported from 1 January 2022. The due date and lodgement method didn't change.
Do I still issue payment summaries / group certificates?
No — STP finalisation replaced them. Once you finalise, employees see an income statement in myGov marked "Tax ready", which they use to lodge their tax return.
When do I finalise?
By 14 July each year. Your finalisation declaration marks employees' income statements as "Tax ready" in myGov. Payment summaries are no longer issued for amounts reported through STP.
STP Phase 2 lodgement on every finalised pay run
Ledra Pay lodges an STP Phase 2 pay event every time you finalise a pay run, with the disaggregated components — overtime, allowances, paid leave, bonuses, directors' fees and salary sacrifice — mapped automatically. Year-end finalisation is a single declaration, and every figure has an auditable trail behind it.
See Australian payroll →Government sources
- Australian Taxation Office — Single Touch Payroll (what STP is, who reports, pay events).
- ATO — Expanding Single Touch Payroll (Phase 2) (disaggregation of gross, employment/income type, cessation reason).
- ATO — Finalising your STP data (end-of-year finalisation declaration, 14 July).
- ATO — Income statement and payment summaries (STP replaced payment summaries; income statements in myGov).