Most businesses would be familiar with the requirement to report payroll information to the ATO each pay day using Single Touch Payroll (STP) software.
Two of the reporting concessions are:
As of 1 July 2021, these concessions will end.
Closely held employees
A closely held employee is an individual who is directly related to the entity from which they receive payments such as:
Family members in a family business;
Directors or shareholders of a company and;
Beneficiaries of a Trust
Many small businesses that pay a family member a wage have been using this current STP exemption.
The ATO have advised that from 1 July 2021 an employer has three options with respect to its ‘closely held employees’:
If you use Option 3, employers must be careful not to under-estimate the amount reported, as this may lead to:
Small employers with only closely held employees have up until the due date of the payee’s tax return to make a finalisation declaration.
From 1 July 2021, the quarterly reporting concession will commonly be considered for micro employers experiencing ‘exceptional circumstances’ such as serious illness or natural disasters (PS LA 2011/15).
In addition, the following circumstances may be considered exceptional:
Your STP reports are due the same day as your quarterly activity statements. If you prefer to lodge monthly, the monthly STP reports must be lodged on or before the 21st day of the following month.
STP finalisation declarations will need to be submitted by 14 July each year.
If you require assistance with STP or the implementation of your STP software please contact GrowBC.
Paul Griffiths CA CTA
Paul Griffiths is a Chartered Accountant with over 20 years assisting Australian Small Businesses with income tax, succession and tax planning matters.