By Rebecca Macdonald and Avery Hong
The deadline for reporting closely held payees for small employers (who have less than 19 employees) has been extended from 1 July 2020, to 1 July 2021. However, keep in mind that this extension only applies to small employers who have closely held employees.
Where the business’s employees are not closely held, employers will still need to be reporting their payroll through STP during each pay period.
Reminder: what is Single Touch Payroll (STP)?
STP enables the ATO to receive real-time data in relation to payroll information, including salaries and wages, PAYG withholding and superannuation liability information. This information is sent to the ATO as you run your payroll through STP-enabled payroll and accounting software. STP reporting began back in 2018 with few exceptions.
Previous deadlines for STP
There are several deadlines for different types of employers to opt-in and begin reporting payroll through STP compliant software each time employers process their payroll. If you have not started STP, you may be able to apply for a deferral.
Large employers – for employers with 20 or more employees – 1 July 2018.
Small employers – for employers with 19 or less employees – 1 July 2019, with an exception for closely held payees.
Micro employers – for employers with 1 – 4 employees – 1 July 2019. However, micro employers may rely on tax agents to report quarterly until 30 June 2021. Micro employers in the following industries can lodge quarterly themselves until 30 June 2021:
- Agriculture, forestry or fishing industry
- Not-for-profit club or associations
Who are closely held payees?
Closely held payees are those employees who are directly related to the business, for example:
- Family members of a family business
- Directors or shareholders of a company
- Beneficiaries of a trust
End of year reporting: PAYG payment summary and income statements
Once you opt into STP, you will no longer be required to provide PAYG payment summaries to your employees. Instead, you will need to “finalise” the income statement. The ATO will receive the information once the STP has been finalised. Employees will be able to access the information online through MyGov services or the tax agent will know if the income statement has been finalised.
Deadline for large employers and small employers to finalise the end of year income statements are by 14 July (already passed) and by 31 July respectively.
For closely-held payees, the deadline to finalise the income statement is by 30 September 2020 if you are voluntarily reporting the closely held payees through STP.
An Important Message
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