Single Touch Payroll (STP) Changes from 1 July 2021
STP changes lie ahead for micro employers and small employers with closely held payees. The ATO has announced the following changes from 1 July 2021:
Micro Employers (four or fewer employees)
The eligibility for concessions from quarterly reporting for small businesses is tightening. This concession will now only be given to those reporting through a tax professional or entities that meet a revised set of criteria (which includes the existence of special circumstances).
This change is likely to mean that many micro employers will now need to adopt quarterly STP reporting.
Small Employers with Closely Held Payees (less than 20 employees)
From 1 July, businesses with closely held payees (that is, those that pay family members, directors, or beneficiaries of a trust) will need to report payments to these individuals through STP. The reporting can be actual (reported on the date of payment), quarterly in arrears or quarterly reasonable estimates. If you need any assistance with the appropriate method for your business, please contact our office.
Businesses may apply for exemptions through a tax professional, but we are not expecting these to be readily granted.
Employers with Self-Managed Super Funds (SMSF)
If this change means you are a newly registered employer for STP purposes, or are reporting on closely held payees for the first time, and these payees have an SMSF, you will need to obtain the Electronic Service Address (ESA) for their fund. If we administer the individual’s SMSF, please contact our superannuation division for that information.
What to do next?
If you already use payroll software like MYOB, XERO, or any other, you can report the required information through this software. Please contact your provider to discuss your options and associated costs.
If you are not using payroll software, you will need to choose a software solution. There are some options at no-cost or low-cost on the ATO website.
While we believe that technology can be a help, we also understand that adapting to new technology can come with teething issues as people adjust to new systems. We understand these changes will impact many businesses, and we are dedicated to helping you make a smooth transition to changes in your reporting. Please contact one of our reporting specialists or your usual partner if you have any questions.
Reece Jory: R.Jory@uhyhnseq.com.au
Gabriela Minervini: G.Minervini@uhyhnseq.com.au
Zoe Redman: Z.Redman@uhyhnseq.com.au