For many employers, EOFY payroll appears straightforward. Complete the final pay run, finalise payroll through Single Touch Payroll (STP), and move on to the new financial year.
In reality, STP finalisation is often the final step of a much larger review process. Before employee income statements are marked as tax ready, businesses should ensure that payroll records, accounting records and ATO reporting all align correctly.
Here are six important checks employers should complete before finalising STP.
One of the most important year-end checks is ensuring that payroll information reported throughout the year aligns with PAYG withholding amounts lodged with the ATO through your BAS.
Any discrepancies should be identified and investigated before payroll is finalised.
A full-year reconciliation should be performed between payroll reports and your accounting records.
This includes reviewing:
Before finalising payroll, employers should review employee records to confirm:
Small errors can become much larger issues once payroll data is finalised.
Year-end payroll reports should be reviewed by management before finalisation.
This provides an opportunity to identify unusual transactions, payroll coding errors or employee record issues before income statements become available to employees.
Once reconciliations have been completed, employers must finalise payroll information through STP.
For most employers, STP finalisation declarations are generally due by 14 July each year. Following finalisation, employee income statements become available through myGov and can be marked as tax ready.
Payroll finalisation is not only about closing the current financial year. It is also an opportunity to review payroll processes, update employee records, confirm wage increases and prepare for upcoming compliance obligations.
With Payday Super commencing from 1 July 2026, payroll accuracy and timely processing will become even more important. As superannuation contributions will generally need to be paid at the same time as salary and wages, businesses will have less time to identify and correct payroll errors after each pay run.
Taking the time to reconcile, review and verify payroll information before STP finalisation can help ensure employees, management and the ATO are all working from accurate and consistent information throughout the year ahead.
Behind every set of year-end financial reports sits a significant amount of reconciliation, review and compliance work. Payroll, superannuation, BAS, GST, bank reconciliations, debtor balances, creditor balances and year-end adjustments must all align accurately before businesses can finalise their books.
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Unpaid super is no longer something directors can afford to treat as a minor payroll issue.
For many small business owners, superannuation still feels like something to deal with after wages, rent, suppliers and cash flow pressures. But legally and practically, super should be treated as part of the employee’s pay package — not something to catch up later.
