STP Finalisation — What You Need to Know

The financial year changeover brings a multitude of added tasks to every business' to-do list; one of these very important tasks is to complete payroll finalisations! All Australian employers must complete their payroll finalisation process for the year using the Single Touch Payroll (STP) system.

With so many other 'moving parts' at this time of year, we refresh your memory on what you need to know about STP finalisations, including when to complete them.

What is STP?

Single Touch Payroll directly sends any tax and superannuation information relating to your employees from your accounting software to the Australian Taxation Office (ATO) each time you run payroll. The information reported to the ATO includes: 

• Details of the pay, including type of income and the breakdown between gross pay, paid leave, overtime etc.
• Details of the pay as you go (PAYG) withholding, including, how much you withheld and how you calculated the amount.
• Superannuation liability information.

Completing your STP finalisations

Following the unique STP finalisation process for your payroll and accounting software is essential to ensure that your employees receive the correct information to lodge their tax returns. Whether you use Xero, Quickbooks, or MYOB, following the process can mean efficiency and accuracy for your business, helping to ensure minimal errors with the information used for your employee's income tax return.

Top tip: many employees eagerly anticipate the arrival of 'tax time', looking forward to getting a refund. Given the current cost-of-living challenges, a small lump sum through a tax return may ease financial stress for many employees. Ensuring your Single Touch Payroll data is correct and lodged promptly can help build a positive employer/employee relationship. Finalising your STP data early is possible if the information is ready!

The STP finalisation process

Finalising your STP data is how you tell the Australian Taxation Office that your Single Touch Payroll reporting has been completed for the relevant financial year.

This is done by making a finalisation declaration through your STP-enabled payroll software. Some payroll software may refer to this as lodging an STP finalisation event, while others may refer to it as EOFY or end of financial year finalisation.

Before you lodge the finalisation event

Before making a finalisation declaration, review your payroll data carefully to make sure the information reported to the ATO is accurate and complete for the correct financial year.

Start by checking employee records and personal details, including names, tax file numbers and employment details. Incorrect personal details can affect an employee’s income statement and may delay their ability to lodge their tax return.

You should also review year-to-date payroll figures, employee’s gross earnings, tax withheld, superannuation contributions, reportable employer superannuation contributions and any reportable fringe benefit amounts. If reportable fringe benefits apply, check the grossed up taxable value before finalising.

It is also important to check all employees paid during the financial year, including terminated employees and anyone paid under multiple pay schedules. If your business uses more than one pay schedule, make sure each specific pay schedule has been reviewed before the STP finalisation event is lodged.

Check that each pay run has been reported with the correct payment date. A common mistake employers can make is reporting payroll amounts in the incorrect financial year because the payment date falls in a different payroll year.

Before submitting, it is a good idea to reconcile your payroll reports against your general ledger and activity statements. You should also check any warnings or missing STP information flagged by your payroll system.

Finalise and submit STP data

Once your payroll information has been reviewed, you can submit your STP finalisation declaration through your STP-enabled payroll software.

The exact steps will depend on the payroll software your business uses. For example, Xero, MYOB and QuickBooks each have their own EOFY or STP finalisation process. In most cases, you will need to review the relevant payroll year, check your organisation details, select the employees to be finalised and submit the finalisation declaration to the ATO.

Before submitting, make sure the financial year, organisation details and employee information are correct. If you need to report fringe benefits, reportable fringe benefit amounts or exempt amounts, these should be entered before the finalisation declaration is lodged.

Once the finalisation declaration has been submitted, the ATO will use the information to update each employee’s income statement. When processed, the employee’s income statement will generally show as “tax ready” in ATO online services through myGov.

Your payroll software may take some time to update the finalisation status after the declaration has been submitted.

If you need to make changes after finalising

If you find an error after lodging your STP finalisation event, you may need to submit an update event or amended finalisation event through your payroll software.

This may be required if there are incorrect personal details, payroll categories have been mapped incorrectly, a tax file number needs to be updated, or employee records do not match the information reported to the ATO.

If further payments are made for the previous financial year after you have finalised, you may also need to lodge further finalisation events so the employee’s income statement information is correct.

If you are changing payroll software or moving from one payroll system to another, it is important to check payroll IDs, finalised pay runs, pay events and year-to-date amounts carefully so income is not duplicated or missed.

Important July 2026 note

Payday Super started on 1 July 2026, but this does not change the STP finalisation process for the 2025–26 financial year.

Employers should still complete STP finalisation by the relevant due date and separately ensure the final quarterly super payment for April to June 2026 is paid by 28 July 2026.

Payment summaries

Under the Single Touch Payroll (STP) system, employers are not required to provide payment summaries to their employees for payments reported and finalised through STP. Instead, this information is made available to employees through ATO online services accessed via myGov, in the form of an income statement, which serves as the equivalent of a payment summary.

However, employers are still required to provide payment summaries and send a payment summary annual report to the ATO for any payments that were not reported and finalised through single touch payroll.

Due dates for STP finalisations

You can submit a finalisation declaration for an employee at any point during the financial year. This would generally be done after the financial year's end for active employees, while terminated employees' declaration can be completed after their employment has ceased. The exact due date for STP finalisations varies depending on your organisation's circumstances, though:

Employers with no closely held payees

If your business does not have any closely held payees, your end-of-year STP finalisation is due by 14 July.

A closely held payee is someone who has a direct relationship with the business, company or trust that pays them. This may include family members in a family business, directors or shareholders of a company, or beneficiaries of a trust.

Employers with both closely held and arm’s length employees

If your business has a mix of closely held employees and arm’s length employees, different due dates may apply.

Arm’s length employees are generally employees who are unrelated to the business and are employed under a typical employment arrangement.

For arm’s length employees, STP finalisation is due by 14 July.

For closely held payees, STP finalisation is generally due by 30 September.

Small employers with only closely held payees

If you are a small employer with only closely held payees, the STP finalisation due date is generally the payee’s income tax return due date.

Who can complete STP finalisations?

You can complete STP finalisation directly through your STP-enabled payroll software, or you can engage a registered tax agent or BAS agent to assist with the process.

If a tax agent is lodging or reviewing payroll information on your behalf, they may need to request client authority before submitting the finalisation declaration.

Bonerath & Co. can help review your payroll reports, check your STP reported earnings and finalise your STP data as part of your end of financial year obligations.

Add STP finalisation to your package

If you'd like to take one extra EOFY task off your to-do list, we'd love to help! Simply reach out to us to discuss adding STP finalisation to your accounting package.

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