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Single Touch Payroll

Each pay run, a summary of your year-to-date payroll data must be sent to the ATO. This guide explains what Single Touch Payroll is, how Microkeeper lodges it with each pay run, and who is responsible for each part.

What is Single Touch Payroll?

Single Touch Payroll (STP) is how employers report payroll data to the ATO electronically, from their payroll software. It covers salaries and wages, PAYG withholding, super, child support and other payments and deductions.

How Single Touch Payroll works. The employee gives their details and TFN when they're onboarded. Your business pays them in Microkeeper, and each pay run is lodged with the ATO with year-to-date pay, tax and super. The ATO checks and records it, and its response shows in the STP Log. After the Final lodgement, the employee's income statement is tax ready in their myGov. Every pay run is lodged on or before its Payment Date, and the last pay run of the year is lodged as Final by 14 July.

Each lodgement sends year-to-date values, so you can think of it as submitting a payment summary every pay run. Microkeeper prepares the data, sends it to the ATO and shows you the response.

Because the ATO receives your payroll data as you go, STP removes these tasks:

  • Processing payment summaries.
  • Filing Tax File Number Declarations (TFNDs), which are included with STP.
  • Separate end of financial year payment summary reporting. You finalise the year with a Final lodgement instead.

Single Touch Payroll workflow in Microkeeper

STP is built into the pay run. Every pay run must be lodged on or before its Payment Date, the day you pay your staff.

Give the ATO your Software ID

Before your first lodgement, add your Microkeeper Software ID to the ATO's Access Manager. The Software ID Setup panel on 2. Submit to ATO shows your ID and walks you through it.

Classify your payments and deductions

Every payroll rule needs the correct STP classification, so each payment and deduction on the payslip is reported in the right category.

Collect your employees' details

Microkeeper's onboarding asks each new employee for their personal details and Tax File Number Declaration, so they're ready before their first pay run.

Complete the pay run

Process the pay run, click Complete Payrun and lock it on 1. Pay Your Team. You can't lodge until the pay run is locked.

Review and lodge

On 2. Submit to ATO, choose the STP Submission type and event type, click Review Data, then I have reviewed data. Tick the declaration and click Lodge STP.

Check the ATO's response

Each lodgement appears in the STP Log with its status and the ATO's message. A lodgement is usually processed within 5 minutes but can take up to 72 hours, and you can't lodge again while one is pending.

A normal lodgement only reports the employees included in that pay run. The Final lodgement at the end of the financial year includes all staff for the year.

Single Touch Payroll through the financial year

  • Every pay run: lock it, then lodge it as Normal Payrun with the Submit event, on or before its Payment Date.
  • If you change a pay run you've lodged: unlock it, correct it, lock it again and lodge it with the Update event.
  • At the end of the financial year: lodge your last pay run as Final Payrun by 14 July. If it's already lodged, lodge it again as Final Payrun with Update. Your employees' income statements are then ready in myGov.

Warning

The Final Zero options, under Show Advanced Options, report zero for every amount. Don't use them to finalise a year that has pay in it. See STP End of Financial Year.

Single Touch Payroll guides

Set Up Single Touch Payroll

Get your business ready for its first lodgement and add your Software ID in Access Manager.

Lodge a Pay Run with STP

Choose the submission and event type, review the data and lodge each pay run.

Staff Changes in Single Touch Payroll

Report new starters, terminations and ETPs, rehires and income type changes.

STP End of Financial Year

Lodge your last pay run as Final, and start STP part way through a year.

Lodge STP as a Registered Agent

Lodge STP on behalf of the businesses you act for as a tax or BAS agent.

STP Reporting Codes

Look up payment and deduction classifications, tax treatment, employment basis, income stream and cessation codes.

Who is responsible for Single Touch Payroll tasks?

Four parties make STP work. If any one of them doesn't meet its obligations on time, the lodgement won't succeed.

PartyObligations
Employee
  1. Enter all personal details.
  2. Enter all tax preferences.
  3. Enter their TFN, or apply for one immediately.
Employer
  1. Give each payroll rule the correct STP classification.
  2. Process payroll.
  3. Amend payroll data as required.
  4. Review the STP payroll data.
  5. Lodge STP.
Microkeeper
  1. Collect and validate all supplied STP data.
  2. Convert the data into the STP format.
  3. Send the data to the ATO.
  4. Receive the ATO's response.
  5. Show the response to the employer.
ATO
  1. Receive the data from Microkeeper.
  2. Analyse and validate the data.
  3. Record the data for business reporting.
  4. Respond to Microkeeper with feedback for the employer.
  5. Make each employee's income statement available in their myGov account once the year is finalised.

Single Touch Payroll terms

TermMeaning
Access ManagerThe ATO's online service where you add Microkeeper's Software ID, so Microkeeper can lodge for your business.
EOFYEnd of financial year, 30 June.
ETPEmployment termination payment, such as a redundancy or payment in lieu of notice.
FinalThe lodgement that finalises an employee's year. Lodging the last pay run of the year as Final Payrun finalises everyone paid that year.
Income statementAn employee's pay, tax and super for the year, in their myGov account. It's tax ready once the year is finalised.
Normal PayrunThe submission type for every pay run except the last one of the year.
Payment DateThe day staff are paid. Each pay run is lodged on or before it, and it decides which financial year the pay run is in.
PAYG withholdingThe tax taken out of an employee's pay and sent to the ATO.
Software IDThe number that identifies Microkeeper to the ATO for your business, in Global Settings under STP Settings.
STP LogThe list of a pay run's lodgements, each with its status and the ATO's message.
SubmitThe event type for a pay run's normal lodgement. The ATO's online services call it a Pay event.
TFN declarationThe form a new employee fills in with their tax file number and tax choices. It's reported with STP.
UpdateThe event type for a lodgement out of cycle, such as correcting a pay run already lodged.
YTDYear to date. Every lodgement reports each employee's totals for the year so far.
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