Small employers (19 or fewer payees) were previously exempt from reporting amounts paid to closely held payees through Single Touch Payroll (STP). Meaning for small businesses that only paid a wage to family members, there was no need to register for or report wages through STP.
From 1 July 2021, this exemption lifts, meaning all employers, including those with only closely held payees, must report wages through STP.
This quite a change for businesses with only related employees where directors commonly draw money from the business during the year as a wage and calculate and report the actual wage at year-end.
For this reason, from 1 July 2021, the ATO is allowing wages paid to related payees to be reported through STP in the following ways:
- Report actual payments on or before the date of payment
- Report actual payments quarterly
- Report a reasonable estimate quarterly
Even if you opt for quarterly reporting, you must still lodge your STP report for related payees through STP-enabled solutions.
The best STP solution provider available is Xero Accounting Software. If you currently use Xero for your bookkeeping needs, it is easy to utilise Xero’s payroll feature. Xero also offer payroll only subscriptions to help with your STP reporting requirements.
If you have any queries regarding the new change in STP reporting requirements, please don’t hesitate to contact our office.
For more information on STP reporting for closely held payees, visit the ATO website: https://www.ato.gov.au/business/single-touch-payroll/concessional-reporting/closely-held-payees/
For other low cost solutions for STP visit: https://softwaredevelopers.ato.gov.au/no-cost-and-low-cost-solutions-single-touch-payroll
If you have any questions about what this means for you and your business Contact Us on (02) 9531 0922.