Employers should be reporting through Single Touch Payroll (STP) unless they only have closely held payees, or they 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. This may affect how you report to the ATO.
STP is a new way for small business owners that employ staff to process payroll and report tax and superannuation information back to the ATO. The ATO requires small business owners report the following employee information before or on each pay day:
A closely held employee is an individual directly related to the entity which they receive payments, Think:
From 1 July 2021, employers must report their closely held payees through STP. You can choose to report these payees each pay day, monthly or quarterly.
From 1 July 2021, the STP quarterly reporting concessions for micro employers will only be available to micro employers who meet certain eligibility requirements which now include the need for exceptional circumstances to exist.
Wages for business owners and those related to the business entities need to be decided before the end of the financial year. Careful planning will be required as the ancient tax planning strategy of declaring wages based off profit (usually after the end of the financial year) is a thing of the past.
If you have any questions about this update,or if you would like to ensure you are ready by for these changes, contact us today.
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