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Changes to STP reporting for small employers with closely held payees

davidarmstrong_img1
Published by:
David Armstrong
Published on:
June 10, 2021
Modoras Accounting (SYD) Pty Ltd ABN 18 622 475 521
Changes in Single Touch Payroll (STP)

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.

Hear our Accounting Directors as they share their insights on how you can maximise your result this tax time. Taking action before 30 June can open up more opportunities for business growth, increased revenue, and enhanced profit margins.

Tax Planning for Businesses Webinar Recorded Live

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (SYD) Pty Ltd ABN 18 622 475 521. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (SYD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (SYD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (SYD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (SYD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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