Single Touch Payroll (STP) Phase 2
A short guide to STP Phase 2 reporting for employers, and where invoicing fits.
Single Touch Payroll (STP) requires employers to send payroll information to the ATO each time they pay employees. This covers salary and wages, PAYG withholding and superannuation. STP Phase 2 added more detail, such as how pay is split by type, why leave was taken and the employment basis of each employee. Employers report through payroll software that is enabled for STP. At the end of the financial year, the employer sends a finalisation declaration. STP is a payroll obligation. 4invoices is an invoicing tool and has no payroll features, so it cannot report STP. If you employ staff, use STP-enabled payroll software or a payroll service.
- STP reports wages, PAYG withholding and super to the ATO at each pay event.
- Phase 2 added more detail on pay types and employment details.
- Year-end uses a finalisation declaration.
- 4invoices does not do payroll or STP reporting.
How it works
Choose STP-enabled payroll software or a payroll provider. The ATO publishes guidance on which products support Phase 2.
Set up each employee's details, such as employment basis and tax file number declaration, in the payroll software.
Run each pay and let the payroll software send the STP report to the ATO.
At year-end, check the figures and send the finalisation declaration. Employees then see their income statement in myGov.
Legal references
- Taxation Administration Act 1953 - the law behind Single Touch Payroll reporting.
- Australian Taxation Office - Single Touch Payroll guidance for employers, including Phase 2 reporting.
Frequently asked questions
Does every employer need to report through STP?
STP applies to employers with employees. The ATO has set rules and some concessions for particular cases, including some small employers. Check the ATO page or ask your agent for your case.
What changed from Phase 1 to Phase 2?
Phase 2 added more detail to the report, such as types of pay, reasons for leave and employment details. Check the ATO guidance for the current list.
Do I still give employees a payment summary?
Employees generally see their income statement in myGov after you finalise. The ATO explains the exceptions on its website.
Can 4invoices run payroll or send STP reports?
No. 4invoices only creates invoices with a tax rate on each line, in any currency, and gives you a PDF. It has no payroll, super or STP features.