Skip to main content

End of Year STP Finalisation for Small Businesses

· 4 min read
Myaccountant Team

Single Touch Payroll (STP) has fundamentally changed how Australian employers report payroll information to the ATO. But the end-of-financial-year finalisation process remains a critical compliance step that every business must complete. Getting it right ensures your employees can access accurate income statements and your business avoids unnecessary penalties.

What Is STP Finalisation?​

STP finalisation is the process of confirming that all payroll information reported to the ATO for the financial year is complete and accurate. It replaces the old requirement to issue individual payment summaries (group certificates) to employees.

When you finalise through STP, you are declaring to the ATO that the year-to-date figures reported in your last STP submission for each employee are the final figures for the financial year. Once finalised, the ATO makes these figures available to employees as income statements through their myGov account.

Key Tasks Before Finalisation​

Before submitting your finalisation event, ensure the following tasks are completed:

Employee Finalisation​

Review every employee's year-to-date figures to confirm that all salary, wages, and allowances are accurately recorded, deductions (including salary sacrifice and novated lease payments) are correct, superannuation contributions match what was actually paid to each employee's fund, and leave balances are up to date.

Pay particular attention to any adjustments made during the year — back payments, corrections, or one-off payments that may have been processed outside your normal payroll cycle.

Reportable Fringe Benefits​

If any employees received fringe benefits with a total taxable value above $2,000, the reportable fringe benefits amount (RFBA) must be included in the STP finalisation. This figure appears on the employee's income statement and may affect their tax return, government benefits, and other income-tested entitlements.

Closely Held Payees​

Closely held payees — directors, shareholders, and their associates who are employees of the business — have different STP reporting requirements. Small employers (19 or fewer employees) are required to report STP information for closely held payees at least quarterly rather than each pay cycle. Ensure all quarterly reports have been lodged and that the year-to-date totals are correct before finalisation.

The Deadline​

The STP finalisation deadline for small businesses is 14 July — two weeks after the end of the financial year. For closely held payees, the deadline is extended to 30 September.

Late finalisation can attract failure-to-lodge penalties from the ATO. While the ATO may exercise discretion in the first instance, repeated late finalisation will result in penalties being applied.

How Income Statements Replace Payment Summaries​

Under STP, employers are no longer required to issue individual payment summaries to employees. Instead, once the STP finalisation event is submitted, the ATO marks the employee's income statement as "tax ready" in myGov. Employees and their tax agents can then access the finalised figures directly when preparing their tax returns.

This is a significant benefit for both employers and employees. Employers save the time and cost of printing and distributing payment summaries, while employees receive their information faster and can be confident it matches what the ATO has on file.

Benefits of STP Finalisation​

  • Streamlined reporting. STP automates year-end reporting, eliminating the need to prepare and distribute separate payment summaries.
  • Enhanced accuracy. Because payroll information is reported throughout the year with each pay run, errors are more likely to be identified and corrected before finalisation — rather than discovered after payment summaries have been issued.
  • Compliance simplification. A single finalisation event replaces multiple manual processes, reducing the risk of penalties for late or incorrect reporting.
  • Employee transparency. Employees can access their income statements through myGov at any time during the year to check year-to-date figures, and can see their finalised statement as soon as the employer submits the finalisation event.

Getting It Right​

STP finalisation is not complex, but it does require attention to detail. Review your figures early, reconcile any discrepancies before 30 June, and submit the finalisation event by the deadline. If you use a bookkeeper or accountant to manage payroll, confirm the timeline and responsibilities well in advance.