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Practical Checklist

STP finalisation for 2025-26: the employer checklist

A working checklist for finalising Single Touch Payroll for the 2025-26 financial year — what to check before you declare, the different deadlines for closely held payees, and how corrections work after finalisation.

Published Sources verified 6 min read

Applies to: FY2025-26 finalisation (most employers due 14 July 2026); verified current at 12 July 2026 · Australia

The direct answer

Most employers must make their Single Touch Payroll finalisation declaration for 2025-26 by 14 July 2026, through STP-enabled payroll software, after checking that every employee’s year-to-date amounts are complete and correct. Finalising marks employees’ income statements “tax ready” in myGov; later deadlines apply for closely held payees, and employers who cannot finalise on time must apply to the ATO for a deferral.

Key points

  • The finalisation declaration for FY2025-26 is due by 14 July 2026 for most employers, per the ATO due-dates calendar updated 29 June 2026.
  • Finalising tells the ATO your reporting is complete: each employee’s income statement becomes “tax ready” in myGov, their return pre-fills, and you no longer issue payment summaries for STP-reported amounts.
  • Closely held payees have later deadlines — 30 September 2026 where the employer has 20 or more employees or a mixed workforce; small employers with only closely held payees have until each payee’s own tax return due date.
  • Before declaring, work through the ATO’s checks: year-to-date amounts correct, every employee included (casuals and departed staff too), the correct financial year selected, the right ABN used, and reportable fringe benefits amounts included where required.
  • If you changed payroll software or employee Payroll IDs during the year, zero out year-to-date amounts in the old system or advise the previous BMS ID — otherwise employee income can be overstated.
  • Mistakes found after finalising are fixed with an update event — within 14 days of detection — and employees who have already lodged may need to amend their returns.

What STP finalisation is and why it matters

A finalisation declaration is the formal signal, made through your STP-enabled payroll software, that you have fully reported for each employee for the financial year. Once you set the finalisation indicator, the ATO treats your figures as complete: each employee’s income statement in myGov changes from “not tax ready” to “tax ready”, and their tax return pre-fills from your reporting.

Finalising also closes out the old paperwork: for amounts reported and finalised through STP, you do not issue payment summaries or lodge a payment summary annual report. Anything you paid that was not reported through STP still needs a payment summary by 14 July 2026.

Important

The ATO tells employees to wait until their income statement is “tax ready” before lodging. Until you finalise, your staff cannot lodge on confirmed figures — and the ATO tells employees whose income statement is still not tax ready after 31 July to speak to their employer.

Key dates for 2025-26

STP finalisation deadlines for the 2025-26 financial year
Employer situationFinalisation deadline
Most employers (arm’s-length employees)14 July 2026
Closely held payees — employer has 20 or more employees30 September 2026
Closely held payees — small employer (19 or fewer) with only closely held payeesThe payee’s own income tax return due date (usually 31 October; it can be later — confirm for each payee)
Mixed workforceArm’s-length employees by 14 July 2026; closely held payees by 30 September 2026

Two adjacent dates worth diarising with this task: payment summaries for non-STP amounts are also due 14 July 2026, and quarter 4 super guarantee contributions (1 April – 30 June 2026) must reach employees’ funds by 28 July 2026 — see our companion resource on super guarantee rates and employer dates.

If you cannot finalise on time, the ATO’s process is to apply for a deferral — an extended due date for the declaration — rather than letting the deadline lapse.

The pre-finalisation checklist

The ATO’s checks for 2025-26, expanded

  • Year-to-date amounts are correct for every employee — reconcile payroll totals against your general ledger and bank payments before declaring.
  • Everyone paid during the year is included — casuals who worked one shift, employees who left in the first quarter, and anyone on unpaid leave with earlier payments.
  • The right financial year is selected — finalising after 30 June makes it easy to accidentally finalise the new year; confirm you are declaring 2025-26.
  • The right ABN — if you operate multiple entities, confirm each STP report went out under the ABN that actually employed the staff.
  • Reportable fringe benefits amounts included — if any employee’s fringe benefits for the FBT year 1 April 2025 – 31 March 2026 exceeded $2,000 in total taxable value, their grossed-up RFBA must be reported as part of finalisation. Our FBT return service covers how these amounts are worked out.
  • Software or Payroll ID changes handled — if you changed payroll software or employee Payroll IDs mid-year, zero out the year-to-date amounts in the old system or advise the ATO of the previous BMS ID, or employee income will be overstated.

Closely held payees — the family-business rules

A closely held payee is someone directly related to the entity paying them — family members of a family business, directors or shareholders of a company, beneficiaries of a trust. Salary, wages and directors’ fees for these payees must go through STP; trust distributions, dividends and genuine loans are outside STP’s scope.

Small employers (19 or fewer payees) can report closely held payees each pay day, quarterly on actuals, or quarterly on a reasonable estimate. The trap in the estimate method: at finalisation you must update the report to the actual year-to-date amounts paid — not simply let the sum of your quarterly estimates stand.

After you finalise — what employees see

From 1 July an employee’s income statement shows “not tax ready” until you declare, then flips to “tax ready”; the ATO notifies them through their myGov inbox once all their income statements are ready. Employees find the statement in ATO online services under Employment → Income statement. If a statement still is not tax ready after 31 July, the ATO tells employees to speak to their employer.

Correcting mistakes after finalisation

The correction sequence

  1. Lodge an update event. Submit the corrected year-to-date details as soon as possible — within 14 days of detecting the error, or by your next regular pay event if your pay cycle runs longer than 14 days.
  2. Un-finalise if you cannot fix it immediately. Lodge an update event with the finalisation indicator removed, so the ATO knows the data is not final and stops treating it as tax ready.
  3. Tell the affected employee. If they have already lodged their return on the wrong figures, they may need to lodge an amendment.
  4. Revise the activity statement where withholding changed. Corrections that change PAYG withholding flow through to labels W1 and W2 on the relevant BAS.

Finalised STP information can be amended up to five years after the end of the financial year, so historical errors remain fixable — but the sooner a correction lands, the less flow-on work for everyone.

Hypothetical example — a mixed workforce with two directors

Imagine “Harbourline Cabinets Pty Ltd”, a fictional company with eight arm’s-length employees and two directors paid directors’ fees (closely held payees). Two deadlines apply for 2025-26: the eight employees must be finalised by 14 July 2026, while the directors can be finalised as late as 30 September 2026. Because the directors were reported quarterly on reasonable estimates, the company must update its STP report to the actual directors’ fees paid before finalising them. Its pre-declaration checks pick up a casual who left in November 2025 (still included) and confirm the correct ABN and year. After declaring, staff see “tax ready” in myGov. When a transposition error is later found in one employee’s figures, the company lodges an update event within 14 days and lets the employee know in case they have already lodged.

This example is entirely hypothetical and illustrates the mechanics only. It is not a client outcome, a prediction, or advice.

Limitations of this information

  • This resource covers the standard STP finalisation process; it does not cover inbound assignees, WPN holders or other niche reporting concessions — check ATO guidance for those cases.
  • Deadlines shown are the general rules current at 12 July 2026; the closely-held deadline for small employers depends on each payee’s own tax return due date, which varies.
  • Penalty exposure for late finalisation is not quantified here because current penalty figures were not verifiable at the verification date — do not infer that missing the deadline is consequence-free.
  • Whether the ATO offers any administrative flexibility in a given year is a matter for the ATO — this resource does not claim any grace period beyond the formal deferral process.

Practical next steps

  1. Reconcile your payroll year-to-date totals against your ledger before 14 July 2026.
  2. Identify any closely held payees and diarise their separate deadline.
  3. If you changed payroll software during the year, resolve the old system’s year-to-date amounts before declaring.
  4. If finalisation cannot happen on time, apply to the ATO for a deferral now rather than after the date.
  5. If you would like the finalisation handled inside a managed payroll service, see our payroll and STP compliance service or contact the practice.

Frequently asked questions

For most employers, the finalisation declaration is due by 14 July 2026. The ATO’s due-dates calendar (updated 29 June 2026) lists the end-of-year STP finalisation declaration on 14 July, and its June 2026 guidance confirms this applies to the 2025-26 financial year. Different deadlines apply for closely held payees.

Official sources

The facts in this resource are drawn from the following official sources, each read on the date shown. If a source has changed since, the source prevails.

Discuss your situation with us

This resource is general information for Australian residents, not tax advice. It does not consider your circumstances, and tax outcomes depend on individual facts. Speak to a registered tax agent before acting. It is also not financial product advice — we are not an Australian financial services licensee. Decisions about superannuation or other financial products should be discussed with a licensed financial adviser.

Last verified against official sources: · Next scheduled review by 1 September 2026 · Update sensitivity: high

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