An STP penalty is the ATO’s failure to lodge penalty: $364 for every 28 days, or part of 28 days, a pay run report is late, up to $1,820 for one late report at the base rate. It doubles if you withhold more than $25,000 a year in PAYG or turn over $1 million to $20 million. The ATO warns you before it applies one, so lodge every missing report now.
When we take over a file, we often find pay runs that were processed but never filed through STP, sometimes for months.
Don’t wait for the ATO to call. Lodge what’s missing, then check the BAS and super for the same weeks, because fixing STP doesn’t fix either of those.
A cafe taking about $15,000 a week might first discover the gap when staff ask why their myGov income statements are empty even though they’ve been paid.
What Should You Do If STP Was Never Lodged?
Start by finding the last STP pay event the ATO actually received, then compare it with your payroll records to identify what’s missing.
You can view lodged STP reports in Online services for business. Use the ATO’s instructions for missed STP reports to choose the catch-up method. A pay run marked as done in Xero isn’t proof the report reached the ATO.
Have these records ready:
- Your pay run history, including the actual paydays and financial years affected.
- The STP reports shown as lodged with the ATO.
- Payroll totals for wages, PAYG withholding and super.
- A list of employees who have left or won’t be paid in the next regular pay run.
- The affected BAS, super payment records and any ATO reminders or penalty notices.
Keep a record of what you found and what you lodge. You’ll want that record if you later need to explain the delay or request penalty remission. If you’re handing the clean-up to hospitality bookkeepers, ask for a list of the gaps and confirmation that the catch-up reporting reached the ATO.
Choose the Catch-Up Method
The ATO gives you several ways to deal with a missed report:
- Lodge the missed report if you can.
- If every employee in that report will be paid again in the next regular pay run, make sure their year-to-date figures in that pay run are up to date.
- If some employees won’t be paid again, lodge an update event as soon as possible to bring their year-to-date balances up to date.
In a venue, the staff who won’t be paid again are usually casuals who’ve moved on, and after a busy season there can be several.
An update event changes employee details or year-to-date amounts outside a payday.
The ATO’s correction period for information already reported isn’t an extension for reports you never lodged. STP is due on or before payday, so a missed report is overdue from the payday it covers.
Check the BAS
Review W1, your gross salary or wages, and W2, your PAYG withholding, on the affected BAS. An STP update event doesn’t change those BAS figures. Revise the affected BAS if those figures need correcting.
Check the Super Payments
Also check that super actually went out for those pay runs. The super section below covers how.
How Much Is an STP Penalty?
It’s $364 for every 28 days, or part of 28 days, that a pay run report is late, up to five lots ($1,820) for one late report.
That’s the base rate. The $364 unit applies where the report fell overdue on or after 1 July 2026. For a report that fell overdue between 7 November 2024 and 30 June 2026, the unit is $330.
The base penalty is doubled if any one of these applies: you’re a medium withholder (more than $25,000 but less than $1 million of PAYG withheld in an income year), your assessable income for the year is more than $1 million but less than $20 million, or your GST turnover is in that range in the month the report was due.
| Maximum for One Late Report | Calculation | Amount |
|---|---|---|
| Base penalty | 5 x $364 | $1,820 |
| Doubled penalty | 5 x $364 x 2 | $3,640 |
A cafe under $1 million a year can still withhold more than $25,000 in PAYG, so check the W2 totals on your BAS before you assume the first row.
The ATO generally doesn’t apply penalties in isolated cases of late lodgment. It says it warns you by phone or in writing before applying a failure to lodge penalty. If you keep missing reports after your first year of STP, the ATO says you may face failure to lodge penalties.
On 18 March 2026 the ATO published a draft practice statement, PS LA 2026/D2, to help it apply penalties when employers report through STP late or inaccurately.
What Could a Late Report Cost Your Cafe?
One pay run report lodged 100 days late could cost a small cafe $1,456.
The cafe from the top of this page turns over about $15,000 a week, around $780,000 a year, and withholds less than $25,000 of PAYG a year, so it’s under every doubling test and the base penalty applies.
There’s no deferral, and the report goes in 100 days after payday.
| Step | Units or Amount |
|---|---|
| 28 days late | 1 unit |
| 56 days late | 2 units |
| 84 days late | 3 units |
| 100 days late (part of a fourth 28 days) | 4 units |
| Penalty unit | $364 |
| Potential penalty | $1,456 |
That’s close to a tenth of the cafe’s weekly takings.
Check what’s actually missing and read any notice the ATO has sent before you worry about a figure.
Why Are Your Staff’s Income Statements Wrong?
A missed STP report means your employee won’t see the correct year-to-date amounts in ATO online services, even if you’ve paid them correctly.
Their payslip comes from your payroll software. The ATO only knows what STP has sent, so until the missing reports go through, staff see lower year-to-date pay than their payslips show. Staff tend to notice when they sit down to do their tax return and the numbers don’t match their payslips.
Once you’ve identified the gap, explain to staff that you’re correcting the payroll reporting. Don’t tell them it’s fixed just because you’ve reopened the pay run. Check that the catch-up report was lodged and the year-to-date figures are correct.
Finalisation Is a Separate Job
Your finalisation declaration is due by 14 July each year. It tells the ATO that you’ve fully reported the financial year’s information for each employee.
After you provide the finalisation indicator, the ATO pre-fills the employee’s tax return and shows their income statement as ‘tax ready’ in myGov. Lodging the missed pay runs doesn’t finalise the year, so staff still won’t see a tax ready statement until you do.
On a new file, one of the first things we check is whether last year’s STP finalisation was ever lodged. More often than you’d think, it wasn’t, and that’s why staff can’t do their tax returns.
If already-finalised information is wrong, lodge an update event as soon as possible. For a prior-year correction where 14 July has passed, correct it now.
When you lodge the update event, include the finalisation indicator. Finalised STP information can be amended up to five years after the end of the financial year.
What Does Missing STP Mean for Super?
Missing STP leaves a gap in the information the ATO uses to check your super obligations, so check the reporting and the payments separately.
For paydays from 1 July 2026, STP must include each employee’s qualifying earnings and super liability. The ATO uses the increase in year-to-date qualifying earnings to calculate the employee’s super guarantee amount for that payday.
Work through the records:
- Compare the super liability in the missed pay runs with your payment records.
- Check the fund received each contribution.
- List any payments that were late or never made. Those need fixing separately from STP.
We also find super that went out late or not at all before a venue came to us, and we’ve lodged super guarantee charge statements to fix it.
Our explanation of Payday Super for hospitality venues covers payment timing. If you find payments were late or never made, follow the steps for missed super and the super guarantee charge.
Can the ATO Remove an STP Penalty?
Yes, you can ask the ATO to remit a failure to lodge penalty, but it expects the missing reports lodged first.
The ATO is likely to decline a request that only says you were busy or didn’t get a reminder.
Put together a clear explanation supported by records:
- What caused the reporting failure.
- When you discovered it.
- What you did to catch up the reporting.
- Emails, payroll records or other evidence supporting that explanation.
Use the ATO’s failure to lodge penalty instructions to check how to request remission. If a penalty does come, the notice is in writing and gives you at least 14 days to pay.
What If Your Bookkeeper Failed to Lodge?
You won’t be liable for the penalty if your bookkeeper is a registered tax or BAS agent and both of these apply:
- You can show you gave the agent all relevant information needed to lodge by the due date.
- The agent’s failure wasn’t caused by recklessness or intentional disregard of tax law.
Having someone called a bookkeeper process payroll isn’t enough by itself.
Keep the emails and payroll records that show what you supplied and when.
If you also discover overdue BAS, the next step is covered in our explanation of ATO late lodgement penalties.
Roger’s ATO debt help comes with a bookkeeping package at no extra cost. As a registered tax agent, we deal with the ATO for you and get overdue BAS, IAS and STP lodgments up to date first.
Key Takeaways
- Check the last STP report the ATO received, not just the last completed pay run in your software.
- Use the ATO’s missed-report options to catch up, including an update event where employees won’t be paid again.
- Review BAS labels W1 and W2 and confirm super payments separately, because an STP update doesn’t fix them.
- Check employee year-to-date totals and finalisation so their income statements show the correct information.
- Lodge outstanding documents before requesting remission. If a registered agent failed to lodge, keep a record of what you gave your agent and when.
If you’d like help with catching up STP reports your last bookkeeper never lodged, you can reach us at (02) 9768 5922 or enquiries@getroger.com.au for a free, no-obligations chat.