Single Touch Payroll (STP) and super fund member reporting are now established parts of Australia’s tax and super framework, and the ATO has signalled clearer guidance on how penalties may be applied when reporting is late, incomplete, incorrect or in the wrong format.
For employers, the key message is that STP isn’t just a payroll process. It’s now a critical data source used across the tax and super systems, including employee income statements, activity statement processes and the ATO’s compliance work on super guarantee. STP information is shared among government agencies and used in real time, which is one reason accurate reporting matters more than ever.
Employers
In practice, the ATO is setting out a firmer administrative approach to obligations that already exist.
Employers’ STP obligations are already clear. When you pay employees, you need to report payroll information through STP-enabled software, including salaries and wages, PAYG withholding and super liability information. You’re generally required to lodge a pay event on or before payday, and by 14 July each year you also need to make an end-of-year finalisation declaration through STP. Unless you’re covered by a deferral or exemption, you should now be reporting through STP Phase 2.
The ATO is explicit that penalties can apply. Employers that haven’t started STP reporting, or have not transitioned to STP Phase 2 and aren’t covered by a deferral or exemption, may be subject to failure to lodge penalties. More broadly, a failure to lodge on time penalty can apply where a required return, statement or report isn’t lodged by the due date, although the ATO also says it generally considers your circumstances and often doesn’t apply penalties in isolated cases of late lodgment.
Superannuation funds
Employer reporting and fund reporting now work together. Super funds must report member account transactions and attributes under the ATO’s reporting protocols, and penalties may apply if a fund fails to lodge required information on time, provides a false or misleading statement, omits information for a member or fails to keep adequate and correct records. Penalties won’t apply for a false or misleading statement where reasonable care was taken.
For employers, this reporting environment means mistakes are more visible. If your business’s payroll records, STP reporting and super payments don’t line up, that can create issues not only for ATO compliance activity, but also for what your employees see in myGov and in their super records.
What should you do now?
First, treat STP as a live compliance obligation, not an end-of-year tidy-up. Report on or before payday and finalise by 14 July.
Second, make sure you’re using the correct STP Phase 2 reporting format if you’re required to do so. The ATO has specifically identified incorrect format reporting as an issue that reduces the effectiveness of event-based reporting.
Third, reconcile your payroll regularly. The ATO recommends checking payroll totals, STP year-to-date figures and BAS reporting, and making sure you have strong payroll governance, documented processes and periodic reviews of controls.
Fourth, fix errors early – timely correction and early engagement matter. If you’re having difficulty meeting obligations, contact us or the ATO as soon as possible rather than waiting for the problem to grow.
