Single Touch Payroll Reporting Changes for Small Business & Micro Employers

  • Home
  • Blog
  • Single Touch Payroll Reporting Changes for Small Business & Micro Employers
NETCorp

Amount paid to closely held payees will need to be reported through STP from 1st July 2021

Single Touch Payroll (STP) reporting for small employers with closely held payees and quarterly STP reporting for micro employers has made changes made that come in effect from 1st July 2021.

What is Single Touch Payroll (STP)?

STP is a regulation from Australian Government to reduce employers reporting burden to government agency. It streamlines the reporting of Tax, superannuation to the employers. Each time the employer pays to the employee, with the help of STP-enabled software, employer can send their employees salary and wage, Tax withheld and super information to Government.

Employers with Closely held payees.

The amount paid to closely held payees will need to be reported through STP from 1stst July 2021. Small employer can choose to report this information quarterly or can report these amounts on or before each payday.

A closely held payee is an individual directly related to the entity from which they receive payments. It includes family members, directors or shareholders of a company, or beneficiaries of a trust for example:

  • family members of a family business
  • directors or shareholders of a company
  • beneficiaries of a trust.

You must continue to report information about all your other employees (known as arm’s length employees) via STP on or before each payday (the statutory due date).

Reporting for Micro Business.

For Micro Business/employer (less than 5 employees) using alternate reporting options, such as BAS agent or registered Tax will have to start using STP reporting from 1st July2021.

Those who meet “exceptional circumstances” the Quarterly reporting concessions will be applicable.

Concession Eligibility

  • On the day you apply be a micro employer.
  • Activity statements to be lodged electronically through a registered tax or BAS agent
  • Keeping records on a spreadsheet or paper and running the payroll manually, a non-computerised payroll.
  • All amounts owing to us are either not yet due or subject to a payment plan.
  • All lodgement obligations are either not yet due or subject to a deferral for applications for a period commencing after 1 July 2021.

Note: ATO will review your Quarterly concession if there is circumstance change.

STP reporting can be done in the following ways.

  • Report actual Payment on or before the date of payment: Report the information on or before each payment made to the closely held payee.
  • Quarterly report actual Payment: Every Quarter when the activity statement is due report all the payment made in quarter to the closely held payee.
  • Quarterly report a reasonable estimate: Across each quarter, report amounts equal to or greater than a percentage of gross payments and tax withheld from the latest year. It is important you do not underestimate amounts reported of your closely help payees or Some penalties may be applied.

What to report?

  • Quarterly option chosen: Then your quarterly STP report is due on or before the due date for quarterly activity statements.
  • You need to report actual payments quarterly. This is inclusive of any concessions which may apply to your circumstances.
  • Quarterly option does not change the due date for notifying and paying the pay as you go (PAYG) withholding tax on your activity statement or making super guarantee contributions for your closely held payees.

Leave A Reply