Nothing phases in — it all starts on pay run one
A sole trader or a small company that has run on contractors and the founder's own labour tends to picture "hiring someone" as a single event: an offer, a start date, a payslip. In practice the first pay run trips several separate regulatory obligations at once, each running to its own clock and its own regulator, and none of them wait for the business to grow into them.
Single Touch Payroll reporting to the ATO starts with that first pay event, not after some threshold of headcount. Super guarantee accrues on that first pay if the employee is eligible, full stop. A TFN declaration is meant to be sorted before or at the start of employment. Award coverage and the minimum pay rate that goes with it exist from the first day worked, whether or not anyone checked which award applies. And workers compensation insurance is, in every state and territory, a condition of engaging a worker at all — not a policy a business can add once it feels established enough to need one. None of these are gradual. They all switch on together.
Single Touch Payroll: reporting from the first pay event
Single Touch Payroll is how the ATO now receives payroll information — salary and wages, PAYG withholding, and superannuation liability — directly from the software a business runs payroll through, at the same time employees are paid rather than in a separate lodgment afterward. A business taking on its first employee is expected to be reporting through STP-enabled software from that first pay run; there is no grace period tied to being new to employing.
Each pay event sends the ATO the year-to-date figures for gross salary or wages, allowances and other payments, deductions and PAYG withholding for every employee included in that run. Under STP Phase 2, those figures are further broken out by income type — ordinary earnings, overtime, bonuses, leave and so on reported as separate categories rather than one lump gross figure — along with the employment basis and, eventually, a cessation reason if the employment ends. That granularity is what lets the ATO hold a continuous year-to-date view of each employee across every employer and pay cycle, and it is also what feeds the super guarantee matching described below.
The practical upshot for a first-time employer is that STP is not a separate compliance task bolted onto payroll — it is a property of running payroll correctly. Choosing STP-enabled software and confirming the first pay event reports cleanly, before the first payday rather than after, is the actual work.
Super guarantee: the rate, and the clock it now runs on
Super guarantee reached 12% of ordinary time earnings on 1 July 2025 — the final step in a scheduled series of increases, and the rate that applies from that date to eligible employees regardless of which part of the pay period falls before or after it. That rate is not indexed on a fixed annual schedule the way some other figures are; it moved because legislation scheduled it to, and 12% is the number to confirm against the ATO's super guarantee page before relying on it, since super settings are the kind of figure that does move with policy changes over time.
What has changed more recently than the rate is the timing. Since 1 July 2026, super guarantee on qualifying earnings has to reach the employee's fund within 7 business days of the payday that generated it — not the old 28-days-after-quarter-end rhythm. That deadline is measured from when the fund actually receives the contribution with enough data to allocate it, so a clearing house that takes a few days to pass the contribution through eats into the 7-day window rather than sitting outside it. New employees get a slightly longer runway — 20 business days after their first qualifying-earnings payday — mainly so a stapled-fund lookup or a choice-of-fund form has time to land before the first contribution has to move. The mechanics of that shift, and what it does to cash-flow rhythm once a business is running fortnightly pay runs instead of quarterly super sweeps, are covered in full on our Payday Super post below.
For a first employee specifically, the practical sequence is: confirm eligibility for super guarantee, complete the standard choice and stapled-fund process, and route the contribution through the same pay-run action that pays wages — not as a follow-up task days later, since under the new timing that gap is exactly what eats the compliance buffer.
The TFN declaration comes before the first payslip, not after
A new employee is meant to provide their employer a tax file number declaration so the employer can work out how much tax to withhold from pay. The declaration can be completed a few ways — the employee lodging it through their own ATO online services linked to myGov, a paper TFN declaration form, or an employer-provided electronic equivalent — but the point of the exercise is the same: the employer needs the outcome before or at the start of employment, not weeks into it. If a completed declaration is not in hand, the employer is expected to withhold at a higher default rate until it is, which is the ATO's way of making the sequencing matter in practice rather than just on paper.
One thing worth flagging to a first employee directly: the ATO advises giving a TFN to an employer only after starting work there, never inside a job application or over the internet — a small point of employee-side hygiene that is worth mentioning during onboarding rather than assuming everyone already knows it.
Award coverage and pay rates are not a guess
Most employment in Australia sits under a modern award, and every award has a coverage clause — usually clause 4 — that defines which industry and which employee classifications it applies to. Working out which award covers a role, and which classification within that award fits the actual work, is not optional groundwork done once and forgotten: it is what the minimum pay rate, penalty rates, allowances and other entitlements for that employee are actually measured against.
The Fair Work Ombudsman's Pay and Conditions Tool, at calculate.fairwork.gov.au, is built for exactly this — searching by occupation or industry to identify the applicable award and calculate the minimum pay and some entitlements that go with a given classification. This post is not going to print a wage figure, because award rates are set and indexed independently of anything CapEasy tracks, they vary by classification and by whether the role is casual, part-time or full-time, and a number quoted here would be stale the moment the award's next indexation lands. The tool, checked against the actual role, is the source — not a figure copied out of a blog post.
Workers compensation: state-based, and due before the first shift
Workers compensation insurance is not a federal scheme — each state and territory runs its own, and the obligation to hold cover attaches to where the work happens, not where the business happens to be registered. Some states run a single government-managed insurer that every employer must use — NSW's icare, Queensland's WorkCover QLD, South Australia's ReturnToWork SA. Others — Victoria, Western Australia, Tasmania, the ACT and the Northern Territory — allow employers to choose among a panel of licensed private insurers. Either way, the requirement to hold a current policy attaches the moment a business engages a worker, not once payroll has been running a while or headcount crosses some threshold.
A business operating across more than one state, or planning to, needs to check the specific state regulator for the jurisdiction the work is actually performed in — the rules on premium calculation, wage declarations and what counts as a notifiable injury are set independently by each scheme, and a policy taken out in one state does not automatically cover work performed in another.
What CapEasy runs, and what stays with your registered agent
The first-pay-run obligations above split cleanly into two lanes: the payroll processing that keeps the numbers right pay after pay, and the lodgment and representation work that only a registered agent can put their name to. CapEasy's payroll processing keeps STP reporting current from the first pay event, calculates super guarantee on qualifying earnings and gets contributions moving on the payday-super timeline, prepares the TFN declaration paperwork alongside onboarding, and keeps the payroll file — award classification notes, pay rate history, super fund details, leave balances — in a state that is ready to hand to whoever needs it.
Everything that file feeds — the actual BAS or activity statement lodgment, any question the ATO raises about a specific super guarantee assessment, the classification call on which award clause genuinely covers a borderline role, and any workers compensation claim or wage declaration to a state regulator — is prepared for your registered BAS or tax agent to lodge and represent. The payroll file exists so that step is a formality with clean numbers behind it, not a scramble to reconstruct what happened on pay run one from memory.
Sources
- ATO — What STP is (Single Touch Payroll)
- ATO — Single Touch Payroll employer reporting guidelines
- ATO — The final SG rate increase is coming on 1 July (12% from 1 July 2025)
- ATO — Super guarantee, key rates and thresholds
- ATO — Payment deadlines for Payday Super
- ATO — Access the TFN declaration form
- ATO — Tax file number and withholding declarations
- Fair Work Ombudsman — About awards
- Fair Work Ombudsman — Pay and Conditions Tool
Reading about it is optional. The books aren’t.
A named accountant, software underneath, licensed partners where the law wants them.