Single Touch Payroll explained
Single Touch Payroll (STP) is a government initiative that requires businesses to report pay details to the ATO digitally.
Online software required
Businesses must use STP software to comply with ATO single touch payroll requirements.
Report every pay run
Xero compiles and sends an STP-compliant payroll report to the ATO each pay day.
STP Phase 2 is coming
Xero users have until 31 December 2022 to start reporting the additional information required.
About Single Touch Payroll Phase 2
In STP Phase 2, employers are required to report additional information to the ATO on or before each payday
Send reports direct to the ATO
Generate and send reports showing employee PAYG withholdings and superannuation liabilities every pay run.
More about Single Touch Payroll
The ATO has granted Xero a deferral on the start date of STP Phase 2. Instead of reporting your first STP Phase 2 pay run on 1 January 2022, all businesses who use Xero Payroll have until 31 December 2022, giving you more time to transition payroll records.See details of the deferred start date
You don’t need to do anything yet but you’ll be able to begin the transition ahead of the deferred compliance date so you have time to adapt. We’ll be providing support, both within Xero and through educational resources, to help you transition employee records to STP Phase 2.See how to get ready for STP Phase 2
The expansion of Single Touch Payroll (Phase 2) means some additional information will need to be reported. This includes income or payment type and the reason for any cessation of employment.See more about the changes at STP Phase 2
Registered tax and BAS agents need to use Xero or other STP software for reporting if they process payroll or calculate pay as you go (PAYG) withholding and super for clients..See how to set up Single Touch payroll in Xero
After each pay run, once pay details from Xero have been reported to the ATO, employees can see up-to-date tax and super information in their ATO online services account. An income statement is also available there at the end of the financial year.See more about STP for employees at the ATO website