Single Touch Payroll (STP) Phase 2 requires employers to report additional payroll data to the ATO, including paid leave, allowances, deductions, and salary sacrifice. Zoho Payroll handles STP Phase 2 reporting, but your setup needs to be correct from the start.
Ensure each pay item in Zoho Payroll is mapped to the correct STP income type. Ordinary earnings, overtime, allowances, bonuses, and commissions each have specific STP categories. Incorrect mapping causes ATO validation errors that delay your reporting.
Paid leave reporting is the biggest change in Phase 2. You now report leave taken (annual, personal, long service) as separate line items, not just as part of gross pay. Configure leave types in Zoho People (if integrated) or directly in Payroll with the correct STP leave category.
Salary sacrifice arrangements, superannuation, novated leases, meal entertainment, need separate reporting. Map each deduction to its STP deduction type. If you're unsure about the classification, check with your accountant before configuring.
Test your STP reporting before your first live pay run. Zoho Payroll generates an STP submission preview. Review it against the ATO's STP Phase 2 specifications. Common errors: missing TFN declarations for new employees, incorrect income type mapping, and superannuation reported in the wrong field.
Integration with Zoho Books means payroll journal entries flow automatically. Verify that wage expenses, PAYG withholding, and superannuation liabilities post to the correct accounts. Your accountant will thank you at year-end.
Published 20 February 2026