ATO Compliance for Employers: Single Touch Payroll and Super Guarantee

Employer obligations in Australia are heavily monitored by the ATO through digital reporting. Two core obligations govern every employer — Single Touch Payroll (STP) and the Superannuation Guarantee (SG) — and a third, Payday Super, is being introduced from 1 July 2026. Getting these right is not just about avoiding penalties; the Super Guarantee Charge, once triggered, removes the tax deductibility of the late super and adds interest and an administration uplift on top, so a missed quarter can cost a business considerably more than the contribution itself.

Single Touch Payroll (STP) Phase 2

STP requires employers to report detailed payroll information — gross salary, PAYG withholding, allowances, paid leave, and super — to the ATO on or before each payday through certified software. STP2 expanded the data reported, including income types, country codes, and disaggregated allowances, which the ATO uses for data-matching against employee returns. A correct STP2 report is now the foundation of an accurate year-end finalisation.

Super Guarantee — 12% and the quarterly deadlines

The Superannuation Guarantee reached its legislated target of 12% from 1 July 2025 and remains at 12% for 2026-27 — the final scheduled increase. Employers must pay SG into a complying employee super fund at least four times a year. The quarterly due dates are 28 October, 28 January, 28 April, and 28 July, and the contribution must be received by the fund by the due date — posting the payment on the due date is not enough.

Payday Super — from 1 July 2026

From 1 July 2026, employers must pay SG contributions at the same time as wages (Payday Super), with contributions required to reach the employee's fund within seven business days of payday. This shifts super from a quarterly catch-up into a rolling payroll obligation. Employers who continue to pay quarterly will fall foul of the new regime, so bookkeeping, payroll software, and cash-flow planning all need to adjust before the change takes effect.

The Super Guarantee Charge and deductibility

If an SG payment is late, the employer is liable for the Super Guarantee Charge — the shortfall, interest (nominal, not compounding), and an administration component. Crucially, an SGC amount is not tax deductible, so a late contribution costs the business twice: the non-deductible super plus the tax the deduction would have saved. Voluntarily paying the shortfall into the employee's fund before the SGC assessment can restore deductibility, but only for the employee-related portion — which is why catching a shortfall early, before the quarter closes, matters so much.

Practical compliance for employers

• Use STP2-compliant software and reconcile each pay run before reporting
• Pay SG to the fund before the due date, not on it — clearing times can be several days
• Review ordinary time earnings against the SG base each year to catch excluded allowances
• Prepare for Payday Super from 1 July 2026 by aligning super payments with each pay run

Employer compliance is an area where prevention is dramatically cheaper than cure. Freedom Taxation manages STP2 reporting, reviews SG calculations against ordinary time earnings each quarter, and is helping clients transition to Payday Super ahead of the 1 July 2026 start — so super is paid correctly, on time, and deductible in the year it was meant to be.