This time last year, we outlined the new requirements for reporting wages to ATO through Single Touch Payroll for all employers (previously it was only mandatory for entities that employed 20+ people). The requirement to report through STP came into effect from 1st July 2019, with an exemption for closely-held entities (which is an entity that only employs closely held payees).
A closely held (related) payee is someone who is directly related to the business, company or trust that pays them, such as:
family members of a family business
directors or shareholders of a company
beneficiaries of a trust.
ATO allowed a 12 month extension of time to start STP reporting for closely-held entities, making the effective date 1st July 2020.
Due to the Covid-19 pandemic, the ATO has recently announced that they are further extending the date to report wages through STP enabled software for closely-held entities, to 1st July 2021. This is a huge relief for many small businesses who would not be able to meet the mandatory reporting requirements in the current economic climate.
Please note that there is no need to apply for an exemption, as this is automatically given to closely-held entities.
If you have any other employees (also known as arm's length employees) they must be reported through Single Touch Payroll on or before each payday unless you are eligible for a micro employer (those with one to four employees) reporting concession.
If you need advice or assistance in meeting employer obligations, particularly in relation to STP, please get in touch with us as soon as possible.