Single Touch Payroll Explained for Hospitality Operators
Every time you pay your staff, your payroll software quietly sends a report to the ATO. That is Single Touch Payroll.
Most operators do not think about it much because it runs in the background. From 1 July 2026, it moves to the foreground. STP becomes the tool the ATO uses to monitor Payday Super compliance, matching what you report each pay run against what your employees' super funds confirm they received.
Getting STP wrong is no longer just a paperwork issue. From 1 July it sits at the centre of super compliance.
What STP Phase 2 Actually Requires
STP Phase 2 has been mandatory since 1 January 2022. Phase 2 requires considerably more detail than Phase 1 did. The ATO wants to see the breakdown of every pay run, not just the total.
For a hospitality venue, a single pay run might include casual staff on weekend penalty rates, a chef receiving a knife allowance, a supervisor on overtime, and a bar worker earning an evening loading. Under Phase 2, each of those components needs to be reported in the correct category, not lumped together as gross wages.
The key requirements are:
Ordinary wages, overtime, allowances, bonuses and leave payments reported as separate line items
Whether each employee is full-time, part-time or casual
Super liability for each employee at each pay event
If your payroll is set up correctly, your software maps this automatically. The risk is a setup that has never been reviewed since Phase 2 came in.
Allowances Are Where Hospitality Gets Caught
Most allowances must be reported as separate line items under Phase 2, not rolled into the hourly rate. This is where hospitality venues most commonly have errors.
Common allowances in hospitality that each carry their own STP treatment:
Knife and tool allowances for chefs required to supply their own equipment
Meal allowances paid for overtime or split shifts
Uniform and laundry allowances for staff required to wear a specific uniform
Split shift allowances under the HIGA for broken shift arrangements
If these are being coded as ordinary wages in your system, your STP reports are inaccurate. A pay item audit before 30 June is worth the time.
The Finalisation Deadline: 14 July 2026
After your last pay run for the year, you need to submit a finalisation declaration. This tells the ATO your reporting is complete. Once done, your employees can see their income statement in myGov marked as tax ready and lodge their tax return.
The deadline for most employers is 14 July 2026.
Two exceptions:
Closely held payees such as directors or family members have a later deadline. For venues with 20 or more staff it is 30 September. For venues with 19 or fewer staff it is tied to the payee's own tax return due date, usually 31 October. Confirm with your BAS agent.
If a registered BAS agent manages your STP, a deferred deadline may apply.
Before you finalise, check that all pay runs are processed, year-to-date totals match what has been reported to the ATO, and any corrections have already been lodged. Do not finalise with known errors. Amendments after finalisation are more complex and hold up your employees' tax returns.
How STP Connects to Payday Super From 1 July
From 1 July 2026, every STP submission must include two new data points for each employee:
Qualifying earnings (QE) replaces ordinary time earnings as the base for calculating super. For most hospitality staff the practical difference is small, but the reporting requirement changes.
Super liability is the exact super amount owing for that pay event.
The ATO matches what you report against what super funds confirm they received via SuperStream. Previously that monitoring happened quarterly. From 1 July it happens every pay run.
For a venue running 20 casual staff across a weekend, every pay run produces a super liability the ATO is tracking in near real-time. There is no longer a quarterly window to catch up.
One important note: employers cannot report qualifying earnings prior to 1 July 2026. The new requirement switches on from 1 July. Check with your payroll software provider now to confirm their update is ready before your first July pay run.
What to Check Before 30 June
Confirm you are on STP Phase 2. If unsure, ask your payroll provider.
Review how allowances are mapped in your system. Knife allowances, meal allowances, split shift allowances and casual loading should each sit in their own category, not rolled into gross wages.
Reconcile your year-to-date payroll against your STP-reported figures. Fix any gaps before you finalise.
Confirm your payroll software is ready for qualifying earnings reporting from 1 July.
Verify super fund details for every employee. A rejected contribution under Payday Super is a compliance issue from day one.
STP Before and After 1 July
Before 1 July 2026 From 1 July 2026
Super earnings base Ordinary time earnings (OTE) Qualifying earnings (QE)
Super payment timing Quarterly Within 7 business days of payday
STP super reporting OTE or super liability (either) QE and super liability (both required)
ATO monitoring Quarterly reconciliation Near real-time via SuperStream
STP has run quietly in the background for years. From 1 July it becomes the ATO's live view of whether you are meeting your Payday Super obligations.
A venue with correctly mapped allowances, accurate super reporting and a clean payroll setup has nothing to worry about.
A venue with knife allowances rolled into the hourly rate and casual loading bundled into gross wages is going to show up in the data.
Get the mapping right before 30 June and submit your finalisation by 14 July.
If you want someone to check your STP setup before the new financial year starts, we are here and love meeting new people.