Changes to STP reporting for small employers with closely held payees

From 1 July 2021, amounts paid to ‘closely held payees’ will need to be reported through Single Touch Payroll (STP).

Small employers — those with 19 or fewer employees — were required to start STP reporting on 1 July 2019.

However, they were exempt from reporting closely held payees for the 2019–20 and 2020–21 income years.

A closely held payee is an individual who is directly related to the entity from which they receive payments.

They include family members of a family business, directors or shareholders of a company, and beneficiaries of a trust.

The STP reporting exemption for closely held payees ends on 30 June 2021.

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).

There’s more flexibility in the way amounts paid to closely held payees can be reported through STP.

You can do it in any of the following ways:

• report actual payments on or before the date of payment
• report actual payments quarterly (when your activity statement is due)
• report a reasonable estimate quarterly — if your circumstances are not materially different to the year for which you most recently completed a finalisation declaration, report 25% of the total amount reported in the previous year.

Get expert advice

If you need a second opinion on the most suitable way for your business to report its closely held payees, call Modoras on 1300 888 803. We’ll be happy to help.

What is STP?

Single Touch Payroll (STP) is an Australian Government initiative. It enables employers to report their employees’ payroll information to the Australian Taxation Office each time the employer pays their employees through STP-enabled software.

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