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Single Touch Payroll (STP) major changes. Are you compliant?

From 1 July 2021, all businesses will be required to report payroll through Single Touch Payroll (STP) unless they are covered by an exemption.

Currently, most businesses are required to report through Single Tough Payroll (STP) unless they only have closely held payees, or are covered by a deferral or exemption. From 1 July 2021 there are changes to STP reporting requirements for small employers with closely held payees and quarterly reporting for micro employers which may impact how you report to the ATO.

Small Employers (19 or fewer employees)

For small employers they have been exempted from reporting closely held payees through STP, however this will change from 1 July 2021.

From 1 July 2021, employers must report their closely held payees through STP. You can choose to report these each pay day, monthly or quarterly.

The ATO defines a closely held payee as an individual who is directly related to the entity from which they receive payments, for example:

  • Family members of a family business
    •  Directors or shareholders of a company
    •  Beneficiaries of a trust.

Micro Employers (4 employees or less)

From 1 July 2021, the eligibility criteria for the STP quarterly reporting concessions for micro employers will change, and will only be available to micro employers who meet certain eligibility requirements which now include the need for exceptional circumstances to exist.

STP Compliant Software – Xero

In order to report your payroll through STP you must use a STP-enabled software such as Xero. By moving to Xero by 30 June 2021 you may be eligible for the Victorian Governments $1,200 Small Business Adaptation rebate and Xero’s EOFY promotions.

For more information or advice on whether you are STP compliant, C&H Accounting Group can assist you.