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. Changes to these STP concessions will end on 30 June 2021.
Small employers have had some concessions when it comes to reporting their own wages (closely held/related). These concessions are coming to an 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 defined as 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 lodgement due dates with the closely held individual.
Quarterly reporting will be available for eligible employers experiencing ‘exceptional or unforeseen circumstances’, which can include natural disaster, serious illness or death. Employers that employ seasonal or intermittent workers or have no or unreliable internet connection may also be considered eligible.
Registered agents will need to apply online for this concession and lodge STP reports on behalf of micro employers.
To avoid any penalties, ensure you have a well-planned strategy in place and stick to it. You should pay yourself as if you were a legitimate employee to meet your living costs.
If these impending changes impact your small business, contact your Arabon accountant on 1300 ARABON to discuss.