The ATO has reminded employers that legislation has been passed to extend Single Touch Payroll (‘STP’) to include all employers from 1 July 2019. This will be a gradual start, and not all employers will start reporting at the same time.
There are the following three categories:
- Employers with 5 to 19 employees (‘small employers’)
Small employers can choose to start reporting early or start reporting anytime from 1 July to 30 September 2019. If you do not think you will be ready to start reporting by 30 September 2019, you can apply for a deferred starting date. Please feel free to contact TaxGo to apply for a deferred starting date. Alternatively, you can also ask the ATO for an exemption (for the employers that live in an area with intermittent or no internet connection). - Employers with 1 to 4 employees (‘micro employers’)
Micro employers can ask registered tax agent to report their STP information quarterly, rather than each time they run payroll. This option will be available until 30 June 2021.
Employers with four or less employees that do not currently use payroll software will be able to use other ways to report STP information. The ATO has asked software developers to build no-cost and low cost less than $10 per month STP solutions for micro employers including apps and portals.
- Employers with closely held payees
A ‘closely held payee’ means the payee is directly related to the entity from which they receive payments, for example: family members of a family-owned business; directors or shareholders of a company; trustees or beneficiaries of a trust.
Employers with 19 or less employees do not need to report closely held payees in 2019/2020. There is no need to apply for exemption.
From 1 July 2020, the employers will need to make reasonable estimate each quarter of the amounts paid to closely held payees, using one of the following methods: actual withdrawals; 25% of the salary from the previous year; vary the previous year’s amount within 15% of the total salary for the current financial year.