There are changes to Single Touch Payroll (STP) reporting for small employers with closely held payees and to quarterly reporting for micro employers from 1 July 2021.
A closely held (related) payee: is someone who is directly related to the business, company or trust that pays them, such as:
- family members of a family business
- directors or shareholders of a company
- beneficiaries of a trust.
From 1 July 2021, employers must report any closely held payees through STP. You can choose to report these payees each pay day, monthly or quarterly.
Ways to report your closely held payees
From 1 July 2021, you can report payments to closely held payees through STP in any of the following ways:
- Report actual payments on or before the date of payment – whenever you make a payment to a closely held payee, report the information on or before each pay event.
- Report actual payments quarterly – report your actual payments to closely held payees quarterly. Each quarter, when your activity statement is due, report all payments made in that quarter.
- Report a reasonable estimate quarterly – report amounts equal to or greater than a percentage of gross payments and tax withheld from the previous year, across each quarter.
A micro employer: is someone with one to four employees.
From 1 July 2021, STP quarterly reporting concessions for micro employers will only be available to those who meet certain eligibility requirements. These now include the need for exceptional circumstances to exist.
To be eligible for this quarterly reporting concession, you must meet all of the following:
- be a micro employer on the day you apply (based on employee headcount)
- lodge your activity statements electronically through a registered tax or BAS agent
- have a non-computerised payroll. This could include running your payroll manually and keeping records on a spreadsheet or paper
- all amounts owing to the ATO are either not yet due or subject to a payment plan
- all lodgment obligations are either not yet due or subject to a deferral
- for applications for a period commencing after 1 July 2021, you must also meet the guidelines for exceptional circumstances.
The following circumstances may be considered exceptional when considering an application for the quarterly reporting concession from 1 July 2021:
- Seasonal or intermittent workers – for micro employers who generally have either no or between one and four employees for most of the year and then increase their workforce for less than three months of a financial year.
- No or unreliable internet connection – ATO would consider the following:
- an inability to connect to the internet
- a connection that consistently requires multiple attempts
- consistent dropouts or disconnections
- exceedingly slow data transfer.
Note: employers with no or intermittent internet connection may also apply for an:
- exemption via your registered tax or BAS agent
- operational deferral – allowing up to an additional three days to lodge.
Employers can apply for this concession through the online deferral tool from 1 July 2021.
Employers who haven't started reporting through STP and don't have a deferral or exemption need to start reporting now.
If you would like any further information or assistance in regards to Single Touch Payroll, please feel free to contact us on 1300 885 761.