Most businesses report through Single Tough Payroll (STP), unless they only have closely held payees, or are covered by a deferral or exemption.

There are changes to STP reporting for small employers with closely held payees and quarterly reporting for micro employers from 1 July 2021 which may impact how you report to the ATO.

Employers with closely held payees

For small employers (19 or fewer employees), they have been exempt from reporting closely held payees through STP, however this will change from 1 July 2021.

From 1 July 2021, employers must report their closely held payees through STP. You can choose to report these each pay day, monthly or quarterly.

The ATO defines a closely held payee as 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.

Businesses that only have closely held payees aren’t required to start STP reporting until 1 July 2021. Read more here.

Micro employers reporting quarterly

From 1 July 2021, the eligibility criteria for the STP quarterly reporting concessions for micro employers will change, and will only be available to micro employers who:

  • Report through a registered tax professional,
  • Meet certain eligibility requirements which now include the need for exceptional circumstances to exist.

Find out more about micro employers and the impact of these changes here.

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