Every time you run payroll, Single Touch Payroll (STP) sends the ATO details: wages, tax withheld, super, and more. That's convenient, but it also means a setup mistake doesn't stay in your payroll software. It goes straight into your employees' ATO records.
Why setup matters more than ever
With STP Phase 2, payments are broken down by type: allowances, overtime, bonuses, paid leave, salary sacrifice, and more. Each pay item in your software needs to be mapped to the right reporting category.
When an item is mapped wrongly, employees can see incorrect figures in myGov. Their tax return may then not match what they were actually paid.
Five things worth checking
Pay item mapping. Is each allowance, leave type and deduction mapped to the correct STP category?
Employee details. Are TFN declarations, income types and tax scales current for every employee?
Super. Is super being calculated on the right earnings and reported correctly, especially now that Payday Super applies?
Terminations. When someone leaves, have we reported their cessation date and reason?
Finalisation. Was the 2025–26 year finalised by 14 July 2026, so employees' income statements were marked "tax ready"?
Fixing errors
You can correct most STP errors in a later pay run or with an update event in your software. The sooner you find them, the simpler the fix, and the fewer awkward conversations with staff at tax time.
A review takes less time than you think.
If you've added new pay items, changed software, or never had your setup checked, an STP review is a smart investment. Exact BAS & Bookkeeping handles payroll and STP reporting for small businesses in Melbourne's east. Call 03 9860 4480.
