For employers, the end of the financial year doesn’t stop at lodging the last payroll run. One of the most important payroll obligations is completing your Single Touch Payroll (STP) finalisation declaration by 14 July each year so employees can access their finalised information and complete their tax returns.

STP finalisation confirms that the salary, wages, PAYG withholding, and other reported payroll details for the financial year are complete and accurate. Once finalised, employees can see their income statement as tax ready in myGov, which is what allows them to lodge their tax return.

In this guide, we’ll explain what STP finalisation is, who needs to complete it, the steps involved across popular payroll platforms, and what to do if you’ve missed the 14 July deadline.

What Is Single Touch Payroll Finalisation?

Single Touch Payroll is the system employers use to report wages, tax withheld, and super information to the ATO each pay cycle. STP finalisation is the end-of-year step that tells the ATO your reporting for that financial year is complete.

Once you submit the finalisation declaration, the ATO marks each employee’s income statement as tax ready in myGov, which is what allows them to lodge their tax return.

Without finalisation, those income statements remain in a pending status. Your employees may be waiting on a refund, and the delay sits with you.

Who Needs to Complete STP Finalisation?

If you have employees and have reported through STP during the financial year, you need to finalise the data for everyone you paid and reported through STP, including part-year employees, terminated employees, and casuals.

Closely held payees are treated differently. The ATO says the due date is 30 September each year for closely held payees where you have 20 or more employees, and for small employers with only closely held payees, the deadline is the payee’s tax return due date

STP Finalisation Due Date

The deadline is 14 July each year. For most small business owners managing payroll themselves, this is the date that matters.

The ATO expects finalisation to be completed for the financial year ending 30 June. Most businesses have until 14 July to submit their declaration. If you use a registered tax agent or BAS agent, they may have a different lodgement deadline. Check with your adviser if you’re unsure.

What’s Involved in STP Finalisation

STP finalisation is a two-step process. The first step is reconciliation. The second is submission.

Step 1: Reconcile Your Payroll Records

Before you finalise, it’s important to make sure that what the ATO has received through your STP reporting actually matches your internal payroll records. This is the reconciliation step, and it’s where errors tend to surface.

What to check:

• Total gross wages paid to each employee
• Total PAYG withholding deducted
• Superannuation contributions reported
• Any allowances, bonuses, or termination payments
• Leave balances if you report these through STP

The goal is to confirm that every pay run submitted throughout the year has been recorded accurately. Discrepancies between your payroll software and the ATO’s records need to be resolved before you submit your finalisation.

What to do if you find a discrepancy. If the numbers don’t match, don’t panic. In most cases, errors found before finalisation can be corrected by processing an updated or amended pay run within your payroll software. Once that’s done, the corrected figures will flow through to the ATO. If you discover an error after you’ve already submitted the finalisation declaration, you can submit an amended finalisation. It is not permanent, and it is fixable. Contact your bookkeeper or payroll software support team if you’re not sure which correction method applies to your situation.

At Rhythm Financial, our reconciliation process involves comparing the actual pay run details in your software against what the ATO has on record through STP. We check everything matches before anything is submitted.

Step 2: Submit the Finalisation Declaration

Once you’re satisfied the numbers are correct, you submit the finalisation through your payroll software.

If you’re choosing or reviewing your payroll platform, our comparison of Xero vs MYOB vs QuickBooks covers the key differences to help you find the best fit for your business.

If you’re unsure which steps apply to your software version, the support documentation within your platform will have the most current navigation guidance.

What Happens After You Submit

After you submit the finalisation declaration, your payroll software should confirm it has been lodged successfully. The ATO says employees then see their income statement status change to tax ready in myGov, and they can use that information to lodge their return.

If you later spot an error, the ATO says you should lodge an amendment as soon as possible and notify employees if the correction affects their income statement.

Pre-Submission Checklist

Before you hit submit, run through this checklist:

• All pay runs for the financial year have been processed and submitted via STP
• Total gross wages, PAYG withholding, and super for each employee have been reconciled against ATO records
• Any discrepancies have been investigated and corrected
• Termination payments, allowances, and bonuses are included if applicable
• Closely held payees (family members or directors) have been identified and the correct deadline confirmed
• You have confirmed the financial year in your payroll software before selecting employees to finalise

What Are the Consequences of Missing the Deadline?

Missing the STP finalisation due date has two types of consequences: one for you as the employer, and one for your employees.

Penalties for Employers

The ATO can issue a Failure to Lodge (FTL) penalty for late or missing STP finalisations. The penalty is calculated at one penalty unit per 28-day period the lodgement is overdue, up to five penalty units. As of July 2025, one penalty unit is AUD 313. For small businesses with a turnover under AUD 1 million, the ATO reduces this penalty by 50 percent.

The ATO does have a remission process for businesses that have a good lodgement history and contact the ATO proactively. If you have not had prior compliance issues, the ATO’s first-time remission policy may apply. Acting quickly and engaging with the ATO, or asking a registered BAS agent to assist, gives you the best chance of having any penalty reduced or waived. A bookkeeper or BAS and IAS lodgements specialist can also assist you in submitting a penalty remission request if needed.

Impact on Your Employees

Your employees cannot lodge their tax returns until their income statements are marked as “tax ready” in myGov. That status depends entirely on your finalisation being submitted. If employees are expecting a refund, every day your finalisation is delayed is a day they wait longer to access that money.

If you’re past 14 July and haven’t finalised yet, submitting as soon as possible will minimise the delay for your employees. Do not wait until you feel everything is perfect before acting. A timely submission with minor amendments to follow is far better than sitting on it.

Need Help with STP Finalisation?

As the 14 July deadline approaches, the last thing most business owners want is to spend hours reconciling payroll records, investigating discrepancies, or worrying about whether their STP reporting is correct.

That’s where we can help. At Rhythm Financial, we can review your payroll records, reconcile your year-end figures, identify any reporting issues, and complete your STP finalisation with confidence. Whether you manage payroll in-house or use payroll software such as Xero, MYOB or QuickBooks, we’ll ensure everything is lodged correctly and on time.

If you’d rather focus on running your business than navigating payroll compliance, get in touch with our team today.

Frequently Asked Questions

What is single touch payroll finalisation?

Single touch payroll finalisation is the end-of-year declaration employers submit to the ATO to confirm that all payroll reporting for the financial year is complete. It marks employee income statements as “tax ready” in myGov so employees can lodge their tax returns.

What is the STP finalisation due date?

The STP finalisation due date for most employers is 14 July each year. The 2025 deadline is 14 July 2025. Closely held payees, such as family members employed in the business, may have a separate deadline of 30 September. Confirm with your bookkeeper if this applies to you.

What if I only took on an employee partway through the year?

You still need to finalise. Even if the employee is casual, joined partway through, or was terminated. If you reported any pay runs through STP during the financial year, you are required to submit a finalisation declaration for that employee.

What happens if I miss the STP finalisation due date?

The ATO can issue a Failure to Lodge penalty, calculated at one penalty unit per 28-day period the lodgement is overdue. Your employees will also be unable to lodge their tax returns until you submit. If you’ve missed the deadline, act as soon as possible and contact the ATO or a registered BAS agent about penalty remission options.

Do I need an accountant or bookkeeper to complete STP finalisation?

Not necessarily. If your payroll records are accurate and up to date, you may be able to complete finalisation yourself using your payroll software. However, if you are unsure about the reconciliation step or have had discrepancies in the past, a bookkeeper can handle the full process and ensure everything is accurate before submission.

What do I do if I made an error after submitting my finalisation?

You can submit an amended finalisation declaration. Contact your bookkeeper or payroll software support team to process the correction.

Single touch payroll finalisation is a straightforward process when your records are in order, and a manageable one even when they’re not.