Answer
STP Employment Status is the ATO classification that Lightning Payroll includes in every Single Touch Payroll submission. It tells the ATO what kind of income relationship exists between the employer and the worker. Choosing the wrong value can cause incorrect income statements and reporting errors, so it is worth reviewing this field for every employee.
Where to find this field
In the desktop app: go to Employees >> Pay Settings >> Pay Rates and look for the STP employment status dropdown.
In the online (web/mobile) app: go to Employees >> Pay Settings >> Pay Rates and look for the STP Employment Status dropdown. This field is only shown for AU companies.
Which option should I choose?
- Full Time — a permanent employee working their contracted full-time hours. This is the most common setting for salaried staff and full-time wage employees.
- Part Time — a permanent employee working less than full-time hours on a regular, ongoing basis.
- Casual — an employee with no guaranteed ongoing hours who is paid a casual rate (usually including casual loading).
- Voluntary Agreement — a contractor or individual who has entered into a written voluntary agreement with you for PAYG withholding. If you select this status, also review the tax settings for that employee. See the related FAQ on setting up Voluntary Agreements.
- Death Beneficiary — use this only when making post-death payments to a deceased employee’s beneficiary or estate.
- Labour Hire (desktop app only) — a worker placed with your business by a labour-hire firm, where the labour-hire firm is responsible for their employment. Select this if the ATO has advised this classification applies.
- Unclassified — a temporary placeholder. This should be changed to the correct status before you next submit STP; leaving employees as Unclassified will generate a warning when submitting.
Related flags on the same screen
The Pay Rates screen also contains several checkboxes that affect how the employee is reported in STP:
- Active Pay Recipient? — tick this for any employee who is currently receiving pays. Untick it only for employees who are on extended leave, have been terminated, or will not receive a pay for an extended period. Inactive employees are still included in STP submissions with zero amounts unless they are excluded.
- Is Closely Held? (AU only) — tick this for a closely held payee, such as a director or family member of a private company who is not at arm’s length. This changes the STP Income Stream to Closely Held Payee (CHP), which affects how the ATO treats their income. Closely held payees have different quarterly reporting obligations.
- Super-only contractor? (no TFN, not reported in STP) (AU only) — tick this for a contractor to whom you pay superannuation but who is not an employee and should not be reported in STP at all. These workers will not appear in STP submissions. Do not tick this for employees.
STP Income Stream (read-only)
The STP Income Stream field on this screen is read-only and is derived automatically from the employee’s settings:
- Salary & Wages (SAW) — the default for most employees.
- Closely Held Payee (CHP) — set automatically when Is Closely Held? is ticked.
- Working Holiday Maker (WHM) — set automatically when the employee’s tax scale is set to Working Holiday. See the related FAQ on setting up tax for working holiday employees.
- Voluntary Agreement (VOL) — set automatically when the employee has a voluntary agreement tax rate and an ABN on file.
You do not set the income stream directly; it is controlled by the fields above. If the income stream shown does not look right, check the Is Closely Held? flag, the tax settings, and whether an ABN and voluntary rate are configured.
For more information on the differences between full-time, part-time, and casual employee setup, see the related FAQ on setting up full-time, part-time, and casual employees.
