Changes to Single Touch Payroll Reporting (STP) Concessions

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:

1.  Payments made to ‘closely held employees’ by small employers (19 or less) and
2. A quarterly reporting option for micro employers (4 or fewer employees)

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’:

1. Report actual payments on or before the date of payment;
2. Report actual payments to closely held employees quarterly, on or before the due date for the employer’s quarterly activity statements;
3. Report a reasonable estimate quarterly, on or before the due date for the employer’s quarterly activity statements

If you use Option 3, employers must be careful not to under-estimate the amount reported, as this may lead to:

1. A shortfall in Superannuation for the quarter, leading to being liable for superannuation guarantee charge (SGC) and SGC statements;
2. Be liable for penalty and interest and;
3. Not be able to deduct the payment for income tax

 
Small employers with only closely held employees have up until the due date of the payee’s tax return to make a finalisation declaration.  

Micro Employers

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:

1. Seasonal or intermittent workers;
2. No or unreliable internet connection.​
   

Any micro employer will need to apply for the concession.

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