EOFY Payroll Reconciliation Australia Checklist 2026

Quick Answer

EOFY payroll reconciliation means confirming your STP figures, super contributions, PAYG withholding, and leave balances all match before 30 June. For 2026 you also need to confirm every super payment was made at the 12% rate and that your payroll software is ready for Payday Super from 1 July. Lodge your STP finalisation with the ATO by 14 July 2026.

Step 1 — Reconcile Your STP Data Against Your Payroll Ledger

Single Touch Payroll means the ATO receives a real-time feed of every pay event you process. By EOFY the ATO already holds a running total of gross wages and PAYG withholding for each of your employees. Your job is to confirm that the figures sitting in your payroll software match exactly what has been reported through STP.

Pull a year-to-date payroll summary report from your software and compare it line by line against the STP submission log. Every pay run you processed between 1 July 2025 and 30 June 2026 should appear. Look for any pay events that were processed outside STP — manual bank transfers, cash payments, or corrections made directly in the ledger without a corresponding STP update. These gaps are the most common cause of reconciliation failures.

If you find a discrepancy, lodge an update event through your STP-enabled software before you submit your finalisation. The ATO allows corrections up to the finalisation date. Do not simply adjust the ledger and hope the mismatch goes unnoticed — the ATO's data matching is automated and it flags inconsistencies automatically.

Step 2 — Reconcile PAYG Withholding Against Your BAS Lodgements

PAYG withholding is the tax you deduct from employee wages and remit to the ATO, either monthly or quarterly depending on your withholding size. By EOFY the total PAYG withholding reported through STP must equal the total amounts you have actually paid to the ATO through your BAS lodgements across the year.

Grab every BAS or IAS you lodged between July 2025 and June 2026 and add up the W2 label amounts — that is the total withholding remitted. Then compare that sum to the total tax withheld figure in your STP year-to-date report. If the BAS total is lower than the STP total, you have withheld tax from employees but not remitted all of it. The ATO will identify this. If the BAS total is higher, you may have overpaid and should check for a credit.

Also verify that each employee's withholding was calculated at the correct rate throughout the year. Check that any employees who lodged a Tax File Number declaration — including those claiming the tax-free threshold — had the right tax scale applied from their first pay run. Employees on working holiday maker visas attract a flat 15% rate up to $45,000; employees without a TFN on file should have been withheld at 47%. Errors here create amended payment summaries and annoyed employees at tax time.

Step 3 — Reconcile Superannuation at the 12% Rate

The Superannuation Guarantee rate has been 12% since 1 July 2025. Every ordinary time earnings payment made to an eligible employee from that date must have had super calculated at 12%, not 11% or 11.5%. If your payroll software was not updated when the rate changed, you may have an underpayment running across the entire financial year.

To reconcile, pull a super contributions report from your payroll software showing each employee's ordinary time earnings and the super amount calculated for each pay period. Divide the super amount by the OTE amount — the result should be 0.12 for every period from July 2025 onward. If you see 0.115 or anything lower, you have an underpayment. The ATO's SuperStream data and the ATO Member Account Transaction Service allow the ATO to match super reported through STP against actual fund receipts, so underpayments are detectable.

Super must be physically received by the employee's fund by 28 July 2026 for the Q4 2025–26 quarter (April to June) to be tax deductible this financial year. Do not wait until late July — fund processing times mean you should initiate the Q4 payment no later than 23 July. If you have any Superannuation Guarantee Charge liability from late or underpaid super in earlier quarters, lodge an SGC statement with the ATO and pay the charge before the quarter's due date to avoid escalating penalties.

Step 4 — Reconcile Leave Balances and Termination Entitlements

Leave balances are a payroll liability on your balance sheet. At EOFY your payroll software's leave balances must match the hours and dollar values in your general ledger. This reconciliation is often skipped and almost always contains errors when it is finally checked.

For annual leave, print a leave balance report per employee and compare the accrued hours to your ledger's annual leave liability account. The dollar value in the ledger should use the employee's current pay rate, not the rate they were on when the leave accrued. Employees covered by modern awards are entitled to annual leave loading of 17.5% on top of their base rate when they take leave — check that your system has been applying this where required. The Fair Work Act 2009 governs minimum annual leave entitlements; most full-time employees accrue four weeks per year.

If any employees were terminated during 2025–26, confirm that their final pay included all accrued but untaken annual leave paid out at the correct rate, plus any applicable redundancy or notice period payments. Termination payments have specific withholding rules under ATO Tax Table for Back Payments, Commissions, Bonuses and Similar Payments — verify that your software applied the right withholding treatment. Incorrect termination withholding is one of the most common triggers for amended income statements.

Step 5 — Finalise Income Statements and Notify Employees

Since 2019, payment summaries have been replaced by income statements delivered directly to employees through myGov via ATO Online. Your responsibility as an employer is to finalise the STP data so the ATO can make each income statement 'tax ready'. Until you finalise, employees see a status of 'not tax ready' and cannot lodge their tax returns.

To finalise, log into your STP-enabled payroll software and submit a finalisation declaration for each employee. This tells the ATO that the YTD figures are correct and the employee's income statement can be made available. You do not send anything directly to employees — the ATO notifies them through myGov. However, it is good practice to send your employees a brief message confirming you have finalised and letting them know they can access their income statement via myGov to lodge their return.

For closely held payees — such as directors, family members on the payroll, or trust beneficiaries — the finalisation deadline is 14 September 2026, not 14 July. If you have any employees in this category, make sure you understand which deadline applies. Employees who ask you for a physical payment summary because they do not have myGov access should be directed to call the ATO on 13 28 61 — you are no longer required to produce paper summaries and doing so can create conflicting records.

Step 6 — Payday Super Readiness Check Before 1 July 2026

Payday Super is not a future consideration — it is 16 days away. From 1 July 2026, super must be paid to an employee's fund within 7 days of each payday. The quarterly accrual model that most small businesses have used for years is gone. If your payroll process still batches super into quarterly payments, it is non-compliant from the moment the new financial year begins.

The practical change this creates is significant. Instead of four super payments per year, a weekly payroll now requires 52. A fortnightly payroll requires 26. Each payment must clear the fund within the 7-day window — not leave your bank account, actually clear the fund. This means your super clearing house processing time matters. The ATO's Small Business Superannuation Clearing House (SBSCH) can take 5 to 7 business days to process, which in practice means you need to initiate the payment on the same day as the pay run, not the following week. Review your clearing house's processing times now and set up automatic super payments linked to each pay run before 1 July.

You also need to confirm your payroll software is ready to generate a super payment instruction automatically with each pay run. SAB Account AI automates this — each time you process payroll, the system calculates the 12% SG on OTE, generates the SuperStream-formatted payment file, and timestamps it against the pay date so you have an auditable record if the ATO ever queries your compliance. The penalties under Payday Super for late payment are calculated per employee per day, making manual quarterly super genuinely expensive from 1 July 2026.

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When is the STP finalisation deadline for 2025–26?

The deadline is 14 July 2026 for most employers. Closely held payees such as directors or family members employed in the business have a later deadline of 14 September 2026. Lodge as early as possible so your employees can access their income statements and lodge their tax returns without delay.

What super rate applies to the full 2025–26 financial year?

The Superannuation Guarantee rate is 12% for the entire 2025–26 year — it increased from 11.5% to 12% on 1 July 2025. Every pay run from July 2025 to June 2026 should show super calculated at 12% of ordinary time earnings. If your software was not updated on 1 July 2025, check for underpayments across the full year.

What happens if I find a PAYG withholding discrepancy during reconciliation?

Lodge an STP update event through your payroll software to correct the figures before you submit your finalisation. If you have under-remitted to the ATO, contact them proactively — voluntary disclosure attracts significantly lower penalties than a compliance review. Do not adjust the ledger without a corresponding STP correction.

Do I still need to give employees a payment summary in 2026?

No. Payment summaries have been replaced by ATO income statements delivered through myGov since 2019. You finalise the STP data and the ATO makes the income statement tax ready in each employee's myGov account. Employees without myGov access should contact the ATO directly on 13 28 61.

How does Payday Super affect my EOFY reconciliation for 2025–26?

Payday Super begins 1 July 2026, so it does not technically apply to the 2025–26 year — your Q4 super (April to June 2026) still has until 28 July 2026 to reach the fund. However, your EOFY reconciliation should include a readiness check confirming your payroll software and clearing house are set up for Payday Super before the first pay run of 2026–27.

Related: Payday Super 2026 · Single Touch Payroll Small Business Australia · How To Pay Super Employees Australia · Payslip Requirements Australia · Australian Payroll Changes 1 July 2026 Complete Guide