What you need to know about STP and the concessions ending June 2021.

Most businesses now report their payroll information via Single Touch Payroll or more commonly known as STP.

However, you may not have known but small employers (under 19) have had some concessions when it comes to reporting their own wages (closely held/related). Well, these concessions are ending as of 30 June 2021.

What you need to do if you are a small/micro employer (under 19)

Start reporting closely held payment via STP either when the actual payment happens, on a quarterly basis, or reporting a reasonable estimate quarterly.

Closely held payments are those payments to family members, directors, shareholders, and/or beneficiaries.

What to look for

Normally you could pay a closely held employee the minimum amount and decide whether to increase their wage at the end of the period depending on the profits or the amounts drawn out of the business. A benefit to doing this means your PAYGW and Super are not due until the end of the period and payable in the June quarter/month. This is no longer the case, by needing to at least estimate the payments (option 3 above), if the ATO finds that the estimates varied more than 25% you can be liable for SGC, your payments could be deemed non-deductible, and you could be facing penalties and interest.

As a small employer, you have until the due date of the employee’s tax return to make a declaration.

How to avoid any penalties?

Have a well-planned strategy in advance and most importantly stick to it. Pay yourself as if you were a legitimate employee in line with your living costs.

If you do not have a strategy or have any questions, contact us today.