The ATO has confirmed that STP reporting for closely held payees will commence from 1 July 2021, after it had granted these employees a one year exemption in the midst of the pandemic last year.
What is STP again?
Via STP compliant software all Employee’s tax and super information is sent to the ATO each pay run (or quarterly if you are closely held payees).
The ATO are implementing this as a way to have more up-to-date information on what employers are paying their staff, how much super they are paying and ensuring it is being paid on time.
What does these mean for you?
From 1 July 2021, you must report payments made to closely held payees through STP compliant payroll software.
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 and shareholders.
From 1 July 2021 there will be three ways to report your closely held payees through your payroll software:
- 1. Report actual payments on the date of payment
- 2. Report actual payments quarterly
- 3. Report a reasonable estimate quarterly by reporting an amount that is equal to or greater than 25% of the previous years reported wages for closely held payees
If you have other employees (known as arm’s length employees) you must continue to report information via STP on or before each pay day.
If you have any queries regarding STP for closely held payees or you are not sure if your current payroll software is STP compliant please do not hesitate to contact us.
If you have any questions or believe you may have paid your employee’s superannuation late please do not hesitate to contact us.
This article appeared in our March 2021 newsletter and the author was Renee Larsen.