Quick answer
Read the status first. Pending means the ATO hasn't answered yet — give it time. Failed is a full failure, usually a wrong ABN/branch or that Xero isn't connected and authorised with the ATO. Still showing Filed but with a warning is a partial failure tied to one employee's details. Fix the specific problem, then click File again to refile the pay run.
WHY IT HAPPENS
The status tells you where to look.
Every pay run shows an STP filing status. Pending means Xero has sent it and is waiting on the ATO — no action needed for a short while. Failed is a full failure: something at the organisation or pay-run level was rejected outright, so nothing lodged. If the run still shows Filed but flags an error, that's a partial failure — the pay run went through, but one or more employees' details were rejected. Full failures point at your business setup (ABN, branch, address, or the ATO connection itself); partial failures point at an individual employee. Match the status to the right fix below.
HOW TO FIX AND REFILE
Work through these in order.
- Read the exact error messageOpen the pay run and click into the STP filing details. Xero usually names the problem — an invalid ABN, an authentication failure, or a specific employee field. Don't refile blindly; the message tells you what to change.
- Give "Pending" some timeIf it's simply Pending, the ATO hasn't responded yet. This can take a little while. Wait and refresh before assuming anything is broken — refiling too soon just adds noise.
- Fix an "authentication failed" / not-connected errorThis means your business isn't yet authorised to lodge through Xero. You need to connect Xero as your STP software with the ATO — either via the ATO's Access Manager (notify the ATO of your hosted software using your STP software ID from Xero's payroll settings) or by phoning the ATO to authorise it. It's a one-off setup; once done, future runs lodge normally.
- Correct ABN and branch errorsFor an invalid ABN or branch message, go to Settings → Organisation details, enter the correct ABN (and branch/GST branch number if you have one), and save. A wrong branch number is a common cause of a full failure.
- Check the organisation addressSome rejections come from an incomplete or invalid business state or postcode. Confirm your organisation's address details are complete and correct in the same settings area before refiling.
- Fix employee validation errorsFor a partial failure, open Payroll → Employees and the flagged person. Check the fields the ATO cares about — TFN (or a valid exemption), date of birth, and a complete postal address — under their Details and Taxes tabs, then save.
- Refile the pay runBack on the posted pay run, choose File (or File Now) to resubmit to the ATO. For an employee-level fix that needs a fresh post, you may need to revert the pay run to draft, repost it, then file again. Confirm the status settles on Filed and the error clears.
If refiling keeps failing — or you're unsure whether Xero is properly connected to the ATO — don't keep resubmitting. Payroll and STP are areas where getting it wrong has ATO consequences, so it's worth confirming the connection, software ID and organisation details are set up correctly once, with help from your bookkeeper, accountant or IT provider.
