Single Touch Payroll Phase 2: Final 2025 Deadline & Compliance Guide
Single Touch Payroll (STP) revolutionised how Australian employers report wages to the ATO. Phase 2—expanding the data set to tax file numbers, child‑support, and income‑stream codes—becomes mandatory for every employer by 30 June 2025. Miss the cut‑off and your business could face $210 per employee in failure‑to‑lodge penalties.
This guide explains the new reporting requirements, common traps, and a practical action plan to stay penalty‑free.
1. Key Changes in STP Phase 2
| Change |
What It Means |
Why It Matters |
| Income‑Type Codes |
Each payment labelled (SAW, CHP, OSP, etc.). |
ATO pre‑fills your employees’ returns. |
| Separate Reporting of Paid Leave |
Annual, personal, long‑service leave must be itemised. |
Impacts leave‑loading and super checks. |
| Tax File Number & Study/HELP Data |
TFN declaration now in STP event. |
No more separate TFN forms. |
| Child‑Support Deductions |
Garnishees reported each pay event. |
Services Australia auto‑matches. |
2. Who Must Comply & When
| Employer Type |
Transition Deadline |
Deferral Option |
| MYOB, Xero, QuickBooks users |
30 June 2025 |
No further blanket deferrals. |
| Custom or legacy payroll systems |
If granted ATO deferral, new due date shown in OSB portal. |
Request before 31 Mar 2025. |
| Micro‑Employers (< 4 staff) |
Same deadline |
Quarterly concession ends Jun 2025. |
| Slip‑Up |
Potential Penalty |
| No Phase 2 data by 1 Jul 2025 |
$210 per employee (failure‑to‑lodge) |
| Incorrect income‑type code |
Administrative penalty plus interest |
| Repeated late filings |
Director penalty notices for PAYGW debts |
4. Four Pain Points & Fixes
| Pain Point |
Quick Fix |
| Software not Phase 2‑ready |
Check ATO’s product register; run test file. |
| Leave balances lumped together |
Split in payroll: annual, personal, long‑service. |
| Manual TFN declarations |
Turn on employee self‑onboarding in software. |
5. 5‑Step Action Plan for SMEs
- Confirm software readiness – update to the latest release this month.
- Audit pay items & leave codes – remap everything to ATO income‑type codes.
- Run a parallel pay run – send a Phase 2 test file to ATO gateway.
- Train payroll staff – 1‑hour session on new fields and validation errors.
- Set OSB alerts – forward ATO error messages to payroll@ inbox.
Quick Compliance Checklist
- Phase 2 toggle switched on in payroll software.
- Income‑type, country‑code, and lump‑sum records mapped.
- First successful “update event” lodged.
- Staff payroll calendar aligned with PAYGW due dates.
- Backup deferral request drafted (if legacy system).
- Phase 2 readiness audit—30‑minute review of your current payroll file.
- Data‑mapping service—bulk‑remap pay categories for Xero, MYOB, QBO.
- STP error‑resolution hotline—we fix ATO rejection errors same‑day.
