STP exemption for small employers extended to July 2021

The ATO has announced that it has extended the Single Touch Payroll (STP) exemption for small employers in relation to closely held payees from 1 July 2020 to 1 July 2021 in response to COVID-19.

Note: A “small employer” is one that has 19 or fewer employees, and a “closely held payee” (or “related payee”) is someone who is directly related to the business, company or trust that pays them, such as family members of a family business, directors or shareholders of a company or beneficiaries of a trust.

This STP exemption for closely held payees applies automatically and small employers do not need to apply to the ATO to access it. However, employers should keep records to support their decision to apply the concession. Alternatively, an employer can notify the ATO and apply for the exemption through the online Business Portal – select “Manage employees”, then “STP deferrals and exemptions”, and then “Exemption”. A registered tax agent can also apply for an exemption on behalf of a client.

If a small employer has any other employees (also known as arm’s length employees), the ATO says they must be reported through STP on or before each payday, unless the employer is eligible for the reporting concession available to micro employers (those with one to four employees). Micro employers who need more time to move to STP reporting can ask their registered tax or BAS agent to report on their behalf on a quarterly basis. This can continue until 30 June 2021.

If you would like to know more please contact one of our accountants on 07 4639 1099 or come in and see us at 4 Bowen Street Toowoomba.