Single Touch Payroll (STP) is a Government initiative that requires Employers to report staff salary, wages and tax withheld to the ATO at the same time they pay their Employees. At the end of the year, Employers won’t need to complete Payment Summaries for their Employees as Payroll information is reported to the ATO in real-time throughout the year.

The information sent to the ATO include all Employees’ wages and salaries, allowances, deductions, Pay As You Go and Superannuation. The information provided is always the Year to Date value of the above elements. Each time a file (defined as a 'Pay Event') is sent to the ATO, this overrides the one previously lodged.

In order to report through Single Touch Payroll to the ATO, Businesses or their Registered Tax Agents, need to connect their Xero Organisations to the ATO. In order to do so, Businesses will need to have access to Online Services for Businesses and therefore have an active MyGovID account.

Connect Xero to the ATO

1. Go to Payroll > Pay Employees
   
   è  The Pay Run screen opens
   
   
   
   
2. Click on [Get started]
   
   è  The Opt-in to Single Touch Payroll screen opens
   
   
   
   
3. Click on [Opt In]
   
   è  The Single Touch Payroll - Organisation details screen opens
   
   
   
   
4. Ensure the Organisation details displayed on this screen are correct, click on Update Organisation details to make any changes or click on [Continue] to proceed
   
   è  The Single Touch Payroll - Agent details screen opens
   
   
   
   
5. Select if you are reporting your Organisation STP Events either directly as the Business or via your Registered Tax Agent
6. Click on [Save and continue]
   
   è  The Single Touch Payroll - Finish screen opens
   
   
   
   
7. Highlight and copy the Practice Software ID (SSID)
8. Click on ATO Access Manager
   
   è  ATO Access Manager
   
   
   
   
9. Login into ATO Access Manager using your MyGovID credentials
10. Select the [My hosted SBR Software Services] Tab
11. Click on [Notify the ATO of your hosted service]
    
    è  The Notify the ATO of your hosted SBR software service screen opens
    
    
    
    
12. Search for Xero or Xero's ABN (89 124 215 247) and select Xero Australia Pty Limited from the list of providers
    
    è  The Identify your hosted SBR software service screen opens
    
    
    
    
13. Paste the SSID from Xero into the Add Software ID field and click on [Next]
    
    è  The Save changes to your hosted SBR software service notification screen opens
    
    
    
    
14. Click on [Save]
15. Return to Xero STP Opt-in screen and select the option I have contacted the ATO to connect my Xero account
    
    è  The Single Touch Payroll - Finish screen
    
    
    
    
16. Click on [Register]