The Australian Taxation Office (ATO) receives payroll information from businesses with Single Touch Payroll (STP) enabled payroll and accounting software each time the business runs its payroll. The ATO provides selected business and job level data items from the STP system to the ABS for the production of statistics.
Scope and coverage
The scope and coverage of these estimates are largely defined and constrained by the characteristics of the data sources from which these estimates are produced. As such, users should note that not all jobs and wages in the Australian labour market are captured within these estimates.
Payroll jobs as reported to the ATO through STP are in scope of these estimates. All payroll jobholders regardless of age or Australian residency status are included. Persons reported via STP must hold either a Tax File Number (TFN) or an Australian Business Number (ABN).
A payroll job is a relationship between an employee and their employing enterprise, where the employee is paid in the reference week through STP-enabled payroll or accounting software and reported to the ATO. Where an employee is paid other than weekly, the established payment pattern is used to include payroll jobs paid in weeks outside the reference week.
Payroll jobs reported via STP exclude owner managers of unincorporated enterprises.
Employers with 20 or more employees (large employers) commenced transition to STP reporting on 1 July 2018, with approximately 99% of large employers reporting through STP at the time of this release. Payroll reporting via STP is still relatively new and some employers have been granted concessions to enable a longer transition period to mandatory STP reporting.
Employers with less than 20 employees (small employers) began transitioning to STP on 1 July 2019. The ATO has made reporting concessions available for small employers where they:
- employ family members or other ‘closely held’ payees,
- are micro employers with one to four employees,
- employ intermittent or seasonal workers, or
- don’t have access to a reliable internet connection.
As such, at the beginning of September 2020 approximately 77% of small employers are reporting through STP. This figure is lower than reported previously, as the ATO has recently redefined and revised their underlying employer population from a 2017 basis to a 2020 basis. This resulted in a decrease in the proportion of small employers reporting through STP as a large number of small employers (with closely held employees) are exempt from STP reporting for this financial year.
In addition, payroll jobs reported in the Defence Industry (ANZSIC Class 7600) are excluded from these estimates by the ABS to better align with other Labour estimates.
The STP reported wages associated with each payroll job are in scope of these estimates. Wages are gross amounts, prior to taxation and deductions and include:
- salary payments and allowances,
- labour hire payments and foreign income,
- the value of payments in kind (where a fringe benefit amount is recorded),
- bonuses where they are reported in the same field as normal payments.
The total wages concept broadly aligns with the Australian System of National Accounts (ASNA) definition of wages and salaries, with the exception of payments to employee's superannuation and severance and termination payments which are excluded.
More specifically, the following STP reported income items are included in the production of wages estimates;
- gross income amount (including bonuses),
- allowance income,
- fringe benefit amount (reportable, taxable),
- fringe benefit amount (reportable, tax exempt),
- other income (not specified),
- foreign income amount including tax exempt income,
- Community Development Employment Project income.
Other data sources
The STP data are enhanced through combining other administrative data held by the ABS (also sourced from the Australian taxation system).
Sex, age and geographic variables are primarily sourced from Client Register data (supplied by ATO to the ABS as part of the transfer of Personal Income Tax data). Sex can only be sourced from Client Register data. When age and geography are not available from Client Register data, they are sourced from STP data. Jobholders whose characteristics cannot be linked or derived (from either Client Register or STP data) are assigned an ‘unknown’ category for that characteristic. For more information, see the Data components, totals and index calculation section of Data limitations and revisions.
Industry of activity and employment size variables of the employing business are sourced from the ABS Business Register.
Further detail on the ATO Client Register and ABS Business Register are included below.
ATO Client Register
The ATO Client Register is a register of persons that have interacted with the ATO and have been issued with an Australian Tax File Number (TFN). The person-level Client Register contains demographic data such as sex, date of birth and residential address. The ABS receives yearly updates (or snapshots) of the de-identified Client Register from the ATO for use in the production of statistics.
Jobholder characteristics were initially sourced from the mid-2019 snapshot. From the 13 April 2021 release, jobholder characteristics such as date of birth (from which age is derived), sex and geography (including sub-state region) have been updated using the mid-2020 snapshot. These characteristics are held constant over the time series to reduce volatility in fluctuating characteristics.
While date of birth is held constant, the age of jobholders (as derived from date of birth) continues to be updated at the start of a jobholder’s birth month each year.
ABS Business Register
The ABS Business Register is populated using data from the Australian Business Register (ABR) and business data from the Australian Tax Office (ATO). Data on the structures of large and complex businesses are also collected by ABS. The ABS Business Register is updated regularly and a frame of business, containing business characteristic information, is produced quarterly for use in the production of statistics.
The March 2020 quarter frame (or snapshot) is currently used to determine industry and employment size for businesses reporting their payroll via STP in these estimates. Once a business’ payroll job is allocated to an industry or employment size, it is held constant against that category over time. By using the March 2020 snapshot and holding employer characteristics constant, the ABS is able to present information about the change in payroll jobs based on the employer characteristics before Australia recorded its 100th confirmed COVID-19 case on 14 March 2020.
Businesses which were created after March 2020 will not appear on the snapshot and are assigned an ‘unknown’ employment size and industry. The number of STP Payroll jobs which do not have employment size or industry is small, and their exclusion is expected to have minimal impact on the industry and employment size estimates. An update of the Business Register snapshot will be undertaken over the next few months. For more information, see the Data components, totals and index calculation section of Data limitations and revisions.