Question 1

What is Single Touch Payroll (STP)?

Accepted Answer

STP is the ATO's digital payroll reporting system. Employers report payroll information (salary, tax withheld, super) to the ATO each time they run payroll — in real-time. It replaced annual Payment Summaries (group certificates) and PAYG withholding annual reports.

Question 2

What changed in STP Phase 2?

Accepted Answer

Phase 2 expanded the data reported: income types (SAW, CHP, WHM, etc.), tax treatment codes, employment basis (full-time/part-time/casual), cessation reasons, country codes, and disaggregated gross amounts (separating allowances, overtime, bonuses, etc.).

Question 3

Do I still need to give employees Payment Summaries?

Accepted Answer

No. STP replaces Payment Summaries. Employees access their year-to-date and end-of-year income statements via myGov (linked to ATO). You must make a finalisation declaration by 14 July each year to confirm all data is correct.

Question 4

What is the finalisation declaration deadline?

Accepted Answer

By 14 July each year. This tells the ATO your STP data for the financial year (1 July – 30 June) is final. Closely held payees have an extended deadline of 30 September. Late finalisations attract FTL penalties.

Question 5

What STP-enabled software do I need?

Accepted Answer

Any ATO-certified STP Phase 2 software. Options include Laabam.One Payroll, Xero, MYOB, QuickBooks, KeyPay, Reckon, or the ATO's free STP tool for 1–4 employees. Your software handles the API submission automatically.

Code	Description	Example
SAW	Salary & Wages	Regular employee salary, hourly wages
CHP	Closely Held Payees	Family members, directors, shareholders of private companies
IAA	Inbound Assignees to Australia	Foreign workers on temporary assignment in Australia
WHM	Working Holiday Makers	Visa subclass 417 or 462 holders
SWP	Seasonal Worker Programme	Pacific Island seasonal workers
VOL	Voluntary Agreements	Contractors who elect PAYG withholding
LA	Labour Hire Arrangements	Workers placed through labour hire agencies
FEI	Foreign Employment Income	Exempt foreign employment income

Single Touch Payroll Phase 2 Guide

STP Phase 1 vs Phase 2

STP Phase 1

STP Phase 2

STP Phase 2 — Income Types

What You Must Report via STP

Gross Payments

Tax & Deductions

Superannuation

Employment Details

Tax Treatment Codes

Frequently Asked Questions