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Australia — Business: Payroll

Employers in Australia withhold PAYG (pay as you go) tax from employee wages and remit it to the ATO, and must report wages, PAYG withholding, and superannuation through Single Touch Payroll (STP) each pay run — STP has replaced the old end-of-year PAYG payment summary ("group certificate") for almost all employers, since employees now see year-to-date figures as an income statement in ATO online services instead.

VerifiedGovernment / official sourceAustralian Taxation Office official guidance on PAYG withholding and Single Touch PayrollLast reviewed: 2026-08-31

Why this matters

Failure to comply with PAYG withholding and STP reporting obligations can result in ATO penalties, and incorrect superannuation payments can trigger the superannuation guarantee charge.

Key facts

  • Businesses that pay employees must register for PAYG withholding with the ATO and withhold tax from wages according to ATO withholding schedules/tax tables.
  • Single Touch Payroll (STP) is mandatory for essentially all employers (phased in fully by 1 July 2019, expanded to STP Phase 2 from 1 January 2022) — payroll, PAYG withholding, and superannuation liability information is reported to the ATO each pay day rather than only at year-end.
  • STP has replaced the old paper/PDF PAYG payment summary (group certificate): employees now access year-to-date income statements through ATO online services (via myGov) instead of receiving a separate annual summary from the employer.

Steps

  1. Step 1: Register for an ABN and PAYG withholding — Register for an ABN and PAYG withholding with the ATO, providing required business and tax information.
  2. Step 2: Withhold and report PAYG tax — Withhold and report PAYG tax on behalf of employees, ensuring accurate and timely reporting to the ATO.
  3. Step 3: Report through Single Touch Payroll each pay run — Use STP-enabled payroll software to report gross wages, PAYG withholding, and superannuation liability to the ATO on or before each pay day, rather than only providing a year-end summary.

Costs

  • Australian Business Number (ABN) registration: free
  • PAYG withholding tax: varies depending on employee earnings and ATO withholding schedules
  • STP-compliant payroll software: varies by provider; low-cost/no-cost STP solutions exist for micro employers (4 or fewer employees)

Timelines

  • PAYG withholding remittance to ATO: monthly or quarterly via activity statements, depending on withholding amount
  • STP reporting: each pay day (on or before payment date)

Required documents

  • Australian Business Number (ABN) registration
  • Employee TFN declaration and Superannuation Standard Choice form
  • STP pay event records (retained via payroll software)

Common mistakes

  • Failure to register for PAYG withholding before the first pay run
  • Not transitioning to STP Phase 2 reporting, risking failure-to-lodge penalties
  • Believing a paper PAYG payment summary is still required at year-end

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