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ATO Reveals STP Reporting Options for Closely Held Payees

Source:ATO Published:2021-02-16

Overview of STP

Single Touch Payroll (STP), is an Australian Government initiative to reduce employers' reporting burdens to government agencies. Under the new system, you’ll use payroll software, or another STPready solution, to send your employees’ salary and wage information, pay as you go (PAYG) withholding, and super information to the ATO each time you pay your employees.

ATO Concessional options

Considering the cost to apply the new STP system for most of small businesses, ATO has provided serval concessions depending on business, industries and employer types.

STP started on 1 July 2018 for employers with 20 or more employees and 1 July 2019 for employers with 19 or fewer employees. Small employers (19 or fewer employees) are exempt from reporting closely held payees through Single Touch Payroll (STP) until 30 June 2021. You must continue to report information about all of your other employees (known as arm's length employees) via STP on or before each pay day (the statutory due date).

What is Closely Held Payee?

A closely held payee is an individual who is directly related to the entity from which they receive payments, for example:

  • family members of a family business 

  • directors or shareholders of a company 

  • beneficiaries of a trust.

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 latest year, across each quarter.

Report actual payments quarterly

If you choose a quarterly reporting option for your closely held payees, your quarterly STP report is due on or before the due date for quarterly activity statements.

This quarterly option does not change the due date for:

  • notifying and paying your pay as you go (PAYG) withholding on your activity statement 

  • making super guarantee contributions for your closely held payees.

You must continue to report information about all of your other employees via STP on or before pay day.

If you have any questions about Payroll, please consult Wis partners' Payroll experts team, and we will spare no effort to provide you with the most professional services.

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