The end of the financial year brings one payroll obligation that cannot be overlooked: Single Touch Payroll (STP) finalisation. For the 2025–26 financial year, most Australian employers must submit their STP finalisation declaration to the ATO by 14 July 2026.
This is how employees receive their income statement, the document they need to lodge their personal tax return. A late or incorrect finalisation can delay tax returns for your entire workforce and attract ATO scrutiny. This guide walks through exactly what STP finalisation involves, how to complete it correctly, and what to do if something goes wrong.
What is STP Finalisation?
Single Touch Payroll is the ATO’s real-time payroll reporting system. Each time an employer processes a pay run, payroll information, including gross wages, tax withheld, and superannuation, is reported directly to the ATO through STP-enabled software.
STP finalisation is the year-end step that confirms all payroll data reported throughout the financial year is complete and accurate. Once finalisation is submitted, employees can view their income statement through myGov and use it to lodge their tax return. STP finalisation replaced the old payment summary (group certificate) process from 1 July 2019.
Key STP Finalisation Dates for 2026
Milestone | Date |
Financial year ends | 30 June 2026 |
STP finalisation deadline, most employers | 14 July 2026 |
STP finalisation deadline, closely held payees | 30 September 2026 |
ATO marks income statements as ‘Tax ready’ | After the employer submits finalisation |
Employee tax return lodgement opens | 1 July 2026 |
Individual tax return deadline (self-lodgers) | 31 October 2026 |
Who Needs to Complete STP Finalisation?
All employers who report through STP must submit a finalisation declaration at the end of each financial year. This includes:
- Businesses of all sizes, from sole traders with one employee to large companies
- Employers using STP Phase 1 or STP Phase 2 reporting
- Businesses using any ATO-approved STP-enabled payroll software
There is a separate, later deadline for closely held payees, such as family members employed in a family business or directors drawing wages. For these individuals, the finalisation deadline is 30 September 2026.
Employers who use a registered tax agent or BAS agent to manage their payroll and STP obligations may qualify for a deferred deadline. If you manage your payroll through a specialist provider, confirm the applicable deadline with them directly.
Step-by-Step: How to Complete STP Finalisation
Step 1: Reconcile Payroll Year-to-Date Figures
Before submitting finalisation, reconcile the year-to-date (YTD) figures in your payroll software against:
- Your general ledger wages and salaries account
- PAYG withholding amounts remitted to the ATO throughout the year
- Superannuation contributions reported and paid
- Any allowances, bonuses, or termination payments processed
Discrepancies between your payroll records and the amounts already reported to the ATO through STP must be corrected before finalisation is submitted. Submitting finalisation with incorrect figures can require an amended declaration later, which creates additional work and may delay employee tax returns.
Step 2: Review Each Employee's YTD Data
Check the individual YTD record for every employee, including those who have left during the year. Key items to verify for each employee include:
Data Point | What to Check |
Gross income | Matches total wages paid, including any termination amounts |
Tax withheld | Aligns with PAYG withholding calculations and remittances |
Super liability | Correct SG rate applied (11.5% for FY2025–26) for eligible earnings |
Allowances | All allowances reported under the correct payment type |
Salary sacrifice | Pre-tax super contributions correctly excluded from gross income |
Reportable fringe benefits | FBT amounts included where applicable |
Reportable employer super | Any employer contributions above the SG minimum are included |
Step 3: Process Any Outstanding Pay Runs
All pay events for the financial year must be reported through STP before finalisation is submitted. If there are any pay runs still to be processed for the period ending 30 June 2026, including back-pay adjustments, leave payouts, or termination payments, these must be submitted first.
Step 4: Update Employee Tax File Numbers and Details
Employees without a valid Tax File Number (TFN) on record may cause errors during finalisation. Review employee records and follow up on any missing or incorrect TFNs before proceeding. Employees who did not provide a TFN should have had withholding applied at the top marginal rate throughout the year.
Step 5: Submit the Finalisation Declaration
Once all data has been reconciled and verified, submit the STP finalisation declaration through your payroll software. The exact process varies by software, but typically involves:
- Navigating to the STP or payroll reporting section of your software
- Selecting the option to ‘finalise’ or ‘end of year finalise’ for the financial year
- Confirming that all employees have been included, including those who left during the year
- Submitting the declaration to the ATO through the software’s ATO lodgement function
Once submitted, the ATO will update the status of each employee’s income statement to ‘Tax ready’ in myGov. Employees should be notified that their income statement is available.
Common STP Finalisation Errors and How to Avoid Them
Common Error | How to Avoid It |
YTD figures don’t match PAYG remittances | Reconcile payroll to the general ledger before finalising |
Former employee not included | Include all employees paid during the year, even if they have left |
Incorrect super amounts reported | Check SG rate and confirm contributions match payroll records |
Missing or invalid TFN | Audit employee records before 30 June and chase up missing TFNs |
Salary sacrifice was not excluded correctly | Confirm pre-tax super contributions are excluded from gross wages |
Allowances reported under the wrong category | Review STP Phase 2 allowance classification rules |
Finalisation submitted before all pay events processed | Complete all pay runs before triggering finalisation |
STP Phase 2: Is Your Business Fully Compliant?
STP Phase 2 expanded the amount of information employers report through STP, including more granular breakdowns of income types, allowances, and deductions. All employers were required to transition to STP Phase 2 by 1 March 2023, with some deferrals granted to specific software providers.
For EOFY 2026, STP Phase 2 compliance is mandatory. If your payroll software has been updated and configured correctly for Phase 2, the additional reporting should be embedded in your regular pay runs. However, employers who have not fully configured their software for Phase 2 categories may find errors surfacing at finalisation.
Businesses using outsourced payroll services will typically have Phase 2 compliance managed as part of their ongoing payroll processing, reducing the risk of miscategorised income types causing issues at year-end.
What Happens After Finalisation is Submitted?
Once the finalisation declaration is accepted by the ATO:
- Employee income statements are marked as ‘Tax ready’ in myGov
- Employees can use their income statement to lodge their personal tax return
- The ATO uses the finalised data to pre-fill information in myTax
- Employers are no longer required to issue paper payment summaries for included employees
If an error is discovered after finalisation has been submitted, an amended finalisation can be lodged through your payroll software. This updates the employee’s income statement and corrects the ATO’s records. Amended finalisations should be submitted as soon as an error is identified to minimise any delay to the affected employee’s tax return.
STP Finalisation and Payday Super: The Connection in FY2026–27
From 1 July 2026, Payday Super takes effect, requiring employers to pay superannuation on each pay cycle rather than quarterly. The ATO will use STP data to cross-match reported super liabilities with super fund receipts in near real-time.
This means STP accuracy becomes even more important from FY2026–27 onwards. Employers entering the new financial year should verify that their STP configuration accurately reflects super liabilities per pay event, as inconsistencies between STP-reported amounts and actual fund collections will be notified more promptly than in the previous quarterly regime.
Accurate, timely payroll reporting is becoming increasingly necessary for firms in payroll-heavy industries ranging from hospitality and construction to healthcare and retail.
Befree helps organisations in various industries with ongoing payroll compliance, STP reporting, and EOFY finalisation processes, allowing employers to fulfil all deadlines without disruption.
For context on how PAYG withholding interacts with STP reporting, reviewing the PAYG withholding rates and obligations for 2026–27 provides a useful reference as the new financial year begins.
Frequently Asked Questions (FAQ)
What is the STP finalisation deadline for 2026?
The STP finalisation deadline for most employers is 14 July 2026. For closely held payees, such as family members employed in a family business or directors, the deadline is 30 September 2026.
What happens if I miss the STP finalisation deadline?
Missing the deadline means employees cannot access their income statement as ‘Tax ready’, which may delay their ability to lodge a personal tax return. The ATO may also follow up with the employer. If you are going to miss the deadline, contact the ATO or your registered agent to discuss options.
Do I need to do STP finalisation for employees who left during the year?
Yes. All employees paid during the financial year, including those who quit, were terminated, or otherwise left, must be included in the final STP. Their income statement must be recognised as ‘Tax ready’ before they may file their personal tax return.
Can my tax agent or BAS agent submit STP finalisation on my behalf?
Yes. A registered tax agent or BAS agent can submit STP finalisation on behalf of an employer. Agents managing payroll on your behalf typically have an extended deadline for STP lodgements. Confirm the applicable deadline and process with your agent directly.
How do employees access their income statement after STP finalisation?
Employees can access their income statement through:
- Their myGov account, linked to the ATO
- The ATO app
- Their registered tax agent, who can access income statements on their behalf
What should I do if I find an error after submitting STP finalisation?
If an error is found after finalisation has been submitted, lodge an amended finalisation through your payroll software as soon as possible. This updates the employee’s income statement with the corrected figures. Notify the affected employee so they are aware that the update has been made before they lodge their tax return.
Does STP finalisation replace the payment summary?
Yes. STP finalisation replaced the old payment summary (group certificate) process for employers reporting through STP. Employees receive an income statement through myGov instead of a paper payment summary. Employers no longer need to issue payment summaries for employees included in STP reporting.