STP Payroll Integration 2025: Software Comparison & Setup Guide

If you’re an Australian business owner, Single Touch Payroll (STP) is now a fundamental part of your payroll process. Since its introduction, STP has evolved, and keeping compliant means using the right software. Manually reporting through the ATO portal is no longer viable for most.

This definitive 2025 guide will help you navigate STP payroll software in Australia, whether you’re starting fresh or looking to integrate STP with your existing payroll system. We’ll compare the top platforms, break down the integration process, analyse costs, and provide a real-world example to ensure a smooth transition.

Popular STP-Enabled Payroll Software Comparison for 2025

Choosing the right platform is the first step to seamless STP compliance. Here’s a comparison of leading solutions, highlighting why Workstem is a powerful contender.

Why Workstem Stands Out: While all these platforms offer STP compliance, Workstem is built as a comprehensive all-in-one payroll and HR platform. This means your STP reporting isn’t just a separate feature; it’s the natural outcome of running your payroll. Data flows automatically from clock-ons to payslips to the ATO, minimising errors and double-handling.

Integration Process: 5 Steps to STP Connectivity

Integrating STP doesn’t have to be complex. Here’s a streamlined process, whether you’re using Workstem or another best STP software Australia 2025 has to offer.

• Assessment & Software Selection: Review your current payroll process. Decide if you need a standalone STP solution or a full-featured platform like Workstem that includes it. Ensure your chosen software is listed on the ATO’s STP Approved Products register.
• Initial Setup & API Configuration: In your software, you’ll connect to the ATO via an API (Application Programming Interface). This is a secure digital handshake. In Workstem, this process is guided and involves entering your business details and ATO credentials to authorise the connection.
• Data Mapping & Migration: This is crucial. Map your existing employee data (TFN, pay rates, allowances, etc.) to the correct fields in your new STP software. Workstem’s system helps automate this import, checking for data inconsistencies that could cause submission errors.
• Dry Run & Test Submissions: Before going live, conduct a test payroll run. Both Workstem and the ATO provide a testing environment where you can submit dummy data to ensure everything is working perfectly without affecting your live records.
• Go Live & Ongoing Reporting: Once testing is successful, you’re ready to go live! Simply process your payroll as normal. Your software will automatically submit the STP report to the ATO upon finalisation of each pay period.

Cost Analysis: STP Software vs Manual Compliance

While the ATO provides a free STP reporting tool for very small businesses (1-4 employees), it’s a manual process. For any growing business, dedicated software offers a significant return on investment (ROI).

The Cost of Manual Compliance:

• Time Consumption: Hours spent each pay period manually entering data into the ATO portal.
• High Error Risk: Manual entry leads to mistakes, potentially resulting in ATO fines or employee disputes.
• Lack of Automation: No integration with time-tracking or accounting, leading to double-handling.

The Value of STP Software like Workstem:

• Time Savings: Automate the entire process, saving 5-10 hours per month or more.
• Accuracy: Automated calculations eliminate transposition errors.
• Broader ROI: It’s not just compliance software. You get a full payroll, HR, and rostering system that improves your entire business operation.

Example ROI Scenario:

A retail business with 50 employees spends 8 hours a fortnight on manual payroll and STP reporting. At an admin cost of $35/hour, that’s $280 per fortnight or over $7,200 per year in labour alone. A Workstem subscription for 50 employees is a fraction of this cost and recoups the investment by freeing up that time for more valuable tasks.

Example: Retail Business STP Setup (50 Employees)

Let’s walk through how “Bayside Retail,” a store with 50 casual and full-time staff, integrates STP with Workstem.

• Onboarding: The Bayside manager signs up for Workstem and uses the bulk import template to upload all employee details (name, DOB, TFN, employment type, base pay rates).
• Linking to the ATO: Within the Workstem settings, the manager clicks “Connect to ATO,” logs in with the business’s myGovID details, and authorises the connection. The secure API link is established.
• Configuring Pay Rules: Bayside configures its specific retail awards, including weekend penalty rates and public holiday loadings directly within Workstem. This ensures every pay is calculated correctly before STP submission.
• First Pay Run & Submission: The manager finalises the weekly payroll. Upon clicking “Finalise,” a summary appears. They click “Submit to ATO,” and Workstem instantly sends the encrypted STP report. The process is complete in one click.

How Workstem Helps Manage STP Obligations?

Ensure your business remains compliant effortlessly. Let Workstem’s automated payroll and integrated STP Phase 2 reporting handle the complexity for you. Explore Workstem’s STP Solution today and ensure peace of mind with every pay run.

Simplify award interpretation and payroll processing with Workstem, the all-in-one workforce management & payroll software designed for every industry. Workstem is an ATO-approved STP Phase 2 solution that simplifies compliance by automating the entire process:

• Built-in Validation: Workstem’s software is designed with the correct STP Phase 2 fields and categories, guiding you to enter data correctly and reducing errors.
• Seamless Integration: As an all-in-one platform, Workstem integrates time & attendance, payroll, and STP reporting. This eliminates manual data entry between systems, ensuring the data you report is accurate and consistent.
• Easy Submissions: Reporting is done with a single click at the end of each pay run, with immediate confirmation from the ATO.
• Simplified Finalisation: The year-end finalisation process is streamlined and can be completed in minutes.

Choose from our Standard or Advanced plan to suit your business needs, and stay Fair Work compliant with confidence.

FAQs About the Single Touch Payroll (STP)

Q1: What is Single Touch Payroll (STP) in simple terms?

A: Single Touch Payroll (STP) is a mandatory Australian government initiative that requires businesses to report their employees’ payroll information—such as salaries, wages, pay-as-you-go (PAYG) withholding, and superannuation—to the Australian Taxation Office (ATO) directly from their payroll software each time they run payroll. It’s “single touch” because the reporting happens with a single action at the same time as you pay your staff.

Q2: Who needs to report through STP?

A: Essentially, all Australian employers must report through STP. If you have even one employee, you are generally required to use STP.

Q3: What is the difference between STP Phase 1 and STP Phase 2?

A: STP Phase 2 expands the reporting requirements introduced in Phase 1. The key difference is the level of detail provided to the ATO.

• STP Phase 1 reported total amounts for key figures like gross earnings and tax withheld.
• STP Phase 2 requires a detailed, disaggregated breakdown of an employee’s income (e.g., separating salary, overtime, allowances, and leave payments).

Q4: What are my ongoing STP reporting obligations?

A: Your main ongoing obligations are:

• Report Each Pay Event: Submit the required data to the ATO on or before every pay day.
• Year-End Finalisation: Finalise your data by 14 July each year. This declares the information for the financial year is complete and correct. This replaces the need to provide payment summaries to your employees.
• Keep Records Accurate: Ensure employee details in your payroll software are always up-to-date (e.g., tax declarations, super fund choice).

Q5: I missed the STP Phase 2 migration deadline. What should I do?

A: You should take action immediately:

• Contact your software provider to start the transition process.
• Lodge a voluntary disclosure with the ATO to explain the delay. The ATO generally looks favorably upon businesses that come forward voluntarily and may provide you with a compliance plan or extra time to transition.
• Ensure you are using an ATO-approved STP Phase 2 solution, like Workstem, to become compliant.

Q6: How does STP help with my employees’ Superannuation?

A: While STP itself does not pay your super, it reports the liability for superannuation to the ATO each payday. This allows the ATO to better monitor and ensure that employers are meeting their super guarantee obligations on time. You still need to pay your super contributions to your employees’ funds by the quarterly due dates.

Q7: Does STP change when I have to pay my tax and super?

A: No. STP is a reporting system, not a payment system. The due dates for paying the PAYG withholding tax you report to the ATO and your super guarantee contributions to funds remain unchanged.

Q8: What happens if I make a mistake in my STP report?

A: Mistakes can be fixed. If you discover an error in a past submission, you can make a STP amendment through your payroll software. You simply correct the information in your system and submit a revised update to the ATO. It’s important to correct errors as soon as you find 

Q9: Where can I find official information from the ATO?

A9: The best source of truth is always the official ATO website. You can find comprehensive guides, news, and resources on their Single Touch Payroll for employers page.

Book a free demo with our payroll experts and experience how Workstem can streamline your payroll and workforce operations.

Read More：

STP Phase 2 Australia: Post-Migration Compliance Guide & Requirements 

Single Touch Payroll 2025: Everything Australian Employers Need to Know

Guide to Single Touch Payroll for Closely Held Payees

Guide to Single Touch Payroll Phase 2

Guide To Single Touch Payroll (STP)