Single Touch Payroll (STP) has fundamentally changed the way Australian employers report payroll information to the ATO. For NDIS and aged care providers, STP compliance is both a legal obligation and an operational discipline.
STP is the ATO's real-time reporting framework, requiring employers to report employee payroll information — salaries, wages, PAYG withholding, and superannuation — to the ATO at or before each pay event. STP Phase 1 was mandatory from July 2019. STP Phase 2 — requiring more granular disaggregated reporting — became mandatory from 1 January 2022. By 2025, all employers should be reporting under Phase 2.
Phase 2 introduced: disaggregated income types (separately reporting salary and wages, allowances by type, leave payments, overtime, bonuses); employment and taxation basis; child support deductions and garnishees; and country codes for working holiday makers. For care providers, your payroll system's pay component coding must be precise — a generic "penalty rates" lump-sum code is not sufficient.
The most common issue is payroll software that has been technically upgraded to Phase 2 but where the underlying pay component configuration has not been reviewed. A second common issue is late or missed STP submissions — STP requires submission at or before the pay event. Third, some providers have multiple payroll systems with only one STP-connected, leaving casual worker payments unreported in real time.
The ATO has signalled its intent to mandate real-time superannuation reporting through "payday super," proposed to apply from 2026. Under this framework, super contributions would need to be paid and reported at the same time as wages. Providers who are still manually calculating and remitting super each quarter will need to invest in more automated systems before this becomes mandatory.
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