What does an Employment Hero STP rejected notice actually mean?
Every time you finalise a pay run in Employment Hero, it submits a “pay event” to the ATO under Single Touch Payroll (STP) Phase 2 reporting. An Employment Hero STP rejected notice means the ATO received that pay event and sent it back. At Payd Co, we treat a rejection as a data problem to isolate, not a system fault: it almost always points to one employee’s details or one pay category, not to Employment Hero itself.
STP Phase 2 also changed what gets reported. Instead of one lump gross figure, each pay run is broken into separate income categories, ordinary gross, paid leave, overtime, bonuses and commissions, salary sacrifice and more, a process the ATO calls disaggregation of gross. That extra detail is where rejections tend to originate, since every pay category in your setup has to map correctly. See the ATO’s own explanation of Single Touch Payroll reporting for the full detail, and Employment Hero’s broader payroll and reporting tools if you’re newer to the platform.
STP rejected vs failed to submit: what’s the difference?
Both show up differently in STP history, and the fix depends on which one you’re looking at.
| Failed to submit | Rejected | |
|---|---|---|
| What happened | The pay event never reached the ATO | The ATO received the pay event and sent it back |
| Where you’ll see it | A submission error at the point of lodgement | A named rejection reason in STP reporting history |
| Typical cause | A connectivity or lodgement-service issue | An employee data or category mapping issue in the pay run |
| What you do | Retry the lodgement once the service issue clears | Fix the underlying data, then resubmit the same pay event |
Symptoms: how you’ll know you’ve got a rejection
You might be seeing:
- An ATO notice referencing your STP data
- A pay run showing as “rejected” in Employment Hero’s STP history
- A pay run that’s finalised in Employment Hero, but the STP submission itself never went through
How to read the rejection reason in Employment Hero’s STP history
Rejections usually point to one employee’s data, not the whole system, and Employment Hero tells you why if you know where to look. Open the STP reporting history for the pay run and find the rejected submission: the reason is listed against it, usually specific enough to name the field or employee record that failed the ATO’s validation. Read that reason before troubleshooting anything else. Resubmitting on a guess is the most common way to burn a lodgement window on a fix that was never going to work.
What causes an Employment Hero STP rejected error?
Three causes account for most rejections we see.
Employee data, most often the TFN
A missing Tax File Number, an invalid TFN, or an outdated TFN exemption code fails the ATO’s validation on its own, even if the rest of the pay run is correct.
ABN or PAYG withholding branch mismatches
If the Australian Business Number recorded in Employment Hero doesn’t match what the ATO has on file, or the withholding branch is wrong, the whole pay event can bounce. The Australian Business Register is the fastest way to confirm your ABN details are current before assuming the error sits elsewhere.
Pay category mapping under STP Phase 2
Because disaggregation of gross means every pay category maps to a specific ATO income type, a newly added category, an allowance, a bonus type, or a custom pay item that hasn’t been mapped correctly is a common source of rejections, particularly soon after go-live or after introducing a new pay category.
In our experience resolving STP rejections for Employment Hero clients, an incorrect TFN or ABN mismatch is behind most first-time rejections right after go-live, while category mapping issues tend to surface later, once a business adds a new allowance or bonus type. If your STP problems started soon after your Employment Hero implementation, start there.
The three checks to run before you escalate
- Find the rejected submission in STP history and read the reason. It’s usually named specifically enough to tell you whether the issue sits with one employee’s record or the pay run as a whole.
- Confirm every employee has a valid TFN and your ABN is correct. Check the flagged employee’s TFN first, then spot-check the rest if the reason isn’t employee-specific, and cross-check your ABN and withholding branch against the Australian Business Register.
- Check STP is enabled to submit for the finalised pay run. A pay run can finalise correctly in Employment Hero without the STP submission itself firing, which shows up as “failed to submit” rather than “rejected” and needs the different fix covered above.
Best for: a business that can read the rejection reason and match it to one of these three causes. Not for: a rejection you’ve already checked against all three without finding the cause, or one close to a reporting deadline, both are worth escalating rather than retrying blind.
How resubmission works once you’ve fixed it
Once you’ve corrected the underlying issue, an employee’s TFN, your ABN, or a pay category mapping, you resubmit the same pay event rather than creating a new one. Once the ATO accepts it, that pay run’s figures flow through to the employee’s year-to-date STP data.
When should you bring in a specialist?
STP issues are time-sensitive: an unresolved rejection means that pay event hasn’t been reported until it’s fixed, a compliance gap that sits with your business, not Employment Hero. If the three checks above don’t turn up the cause, or a deadline is close, escalate rather than keep guessing.
Payd Co is an Employment Hero Certified Partner based in Perth, and STP troubleshooting is part of the ongoing support we provide to clients after go-live. We’re also an APA and GPA member, so award and compliance detail sits inside our day-to-day work, not on the edge of it. A rejection caused by category mapping often connects to the same setup work behind other data errors, like overtime or penalty rates calculating wrong or a superannuation amount that looks wrong, worth a wider check of your category setup while you’re in there.
What does the ATO expect while I’m fixing a rejected STP lodgement?
The ATO expects the underlying pay event to be reported once you’ve resolved the rejection. Compliance obligations, and any penalty exposure, sit with your business, so if a deadline is at risk, talk to the ATO directly or your registered tax or BAS agent rather than guessing at what’s acceptable in your situation.
Does an STP rejection affect my employees’ myGov information?
A rejected pay event hasn’t reached the ATO, so it won’t yet appear in an employee’s income statement in myGov. Once you fix the underlying issue and Employment Hero resubmits successfully, the year-to-date figures update to include that pay run, so there’s no permanent gap once it’s accepted.
How long does it take to resubmit a rejected STP lodgement in Employment Hero?
Resubmitting itself is quick: once the underlying data is fixed, Employment Hero lodges the pay event again the same way it would for any pay run. The real time cost is usually finding and correcting the cause, which can take minutes for a simple TFN typo, or longer for a pay category mapping issue.
The part we handle
STP rejections are time-sensitive: the pay event isn't reported to the ATO until the resubmission goes through. If you're up against a deadline, or the fix isn't obvious from the rejection reason, Payd Co can step in as your Certified Employment Hero Partner and get it resolved.
Resolve an STP rejection