Single Touch Payroll (STP) finalisation may sound like just another compliance task, but for small and medium businesses, it’s a critical step that directly affects your team’s ability to lodge their tax returns accurately and on time.
With the STP finalisation deadline on 14 July 2025, now is the time for SMEs to get payroll right. Here’s what you need to know and do.
What is STP Finalisation?
STP finalisation is the process of confirming all your payroll data for the financial year is accurate and complete. Once finalised, your employees’ income statements become ‘tax ready’ in their myGov accounts – replacing the old paper payment summaries.
Deadline: 14 July 2025
All updates, corrections, or payroll changes must be completed before 14 July. Once you finalise, you can’t make any changes, so it’s vital to get it right the first time.
Common Mistakes to Avoid
- Finalising the Wrong Year
Don’t rush, make sure you’re declaring for the correct financial year. This is a common mistake, especially if you’re finalising after 30 June. - Not Including all Employees
All employees paid during the year (including casuals and terminated staff) must be included, even if they only worked a short time. - Switching Payroll Software Mid-Year
If you switched payroll systems or updated Payroll IDs mid-year, make sure you’ve removed any duplicate YTD amounts from the old system or notified the ATO of your previous BMS ID. This helps prevent overstated income on your employees’ records.
What About Closely Held Payees?
If you’re a small business with 19 or fewer employees, and only pay closely held payees (like directors or family members), your finalisation deadline is their tax return due date.
If you have a mix of both arms-length and closely held employees, your closely held payees have until 30 September 2025, while others still fall under the 14 July deadline.
What to Tell Your Employees
- You don’t need to give them a payment summary anymore.
- Their income statement is available through myGov or their tax agent.
- They should wait until it’s marked ‘tax ready’ before lodging.
- Their details must be up to date with both you and the ATO.
Final Thoughts
STP finalisation isn’t just a legal obligation – it’s a way to make tax time smooth and stress-free for your business and your team. Avoiding common pitfalls now can save you a world of hassle later.
