Currently, small employers (19 or less) are exempt from reporting ‘closely held payees’ through Single Touch Payroll (STP). Micro employers (4 or less) have also had the option of quarterly STP reporting. These concessions will end on 30 June 2021.
From 1 July 2021, these employers must report payments through Single Touch Payroll using the following options:
Closely held payees & Small employers
A ‘closely held payee’ is an individual directly related to the entity they receive payments from. For example, family members of a family business, directors or shareholders of a company and beneficiaries of a trust.
Small employers must report payments made to closely held payees through an STP-enabled solution using one of three options:
- Report actual payments on or before the due date:
Report payments to closely held payees on or before each pay event.
- Report actual payments quarterly:
Payments to closely held payees for each quarter are to be reported by the time your activity statement due.
- Report a reasonable estimate quarterly:
Report amounts quarterly based on a reasonable estimate. If circumstances have not materially changed, it is reasonable to report year to date amounts each quarter that are equal to the previous year.
Small employers with only closely held payees have up until the due date of the payee’s individual tax return to make a finalisation declaration. Employers will need to confirm lodgment due dates with the closely held individual.
Quarterly reporting will be available for eligible employers experiencing ‘exceptional or unforeseen circumstances’. For example, the ATO will consider employers affected by natural disaster, serious illness or death. Employers that employ seasonal or intermittent workers or have no or unreliable internet connection can also be considered eligible.
Registered agents will need to apply online for this concession and lodge STP reports on behalf of micro employers.
Contributed by Nathan Batty.