New ATO reporting any payment obligations from 1 July 2021 for payments to non arms length employees

Single Touch Payroll (STP), was introduced on 1 July 2018 as an Australian Government initiative to reduce employers’ reporting burdens to government agencies. With STP, employees’ payroll information was reported each time the employee was paid through STP-enabled software.

If you are a small employer (or less than 19 payees in total) making salary or wage type payments to family members of a family trust, directors, shareholders or beneficiaries (“closely held payees”), you have have been provided with an STP reporting concession. However, from 1 July 2021 you will need to report those payments at least quarterly through the single touch payroll (STP) system, through an STP enabled software solution. Lodgement through the ATO portal or through a BAS will not be possible.

For those that previously may have determined salaries, wages or directors fees after the end of the financial year, you will now need to report the actual amounts on or before each payday or quarter, or a reasonable estimate each quarter. If you choose to report an amount quarterly, you will still need to include any PAYG withholding amounts on your activity statement and pay the PAYG liability to the ATO and make superannuation guarantee contributions for your closely held payees before the quarterly due date.

Prime can assist with this process and also in determining a reasonable estimated amount, if you choose to take that approach.

If you have any questions regarding these grants and require any assistance on processing your applications, please do not hesitate to contact the Prime Accounting and Business Advisory team via the following contact details:

Brisbane / Sydney
Matthew Smith – matts@primefinancial.com.au
John Driscoll – johnd@primefinancial.com.au
Sean Fincham – seanf@primefinancial.com.au

Melbourne
Matt Murphy – mattm@primefinancial.com.au
Brendan Brown – brendanb@primefinancial.com.au
Simone Quin – simoneq@primefinancial.com.au
Paul Minieri – paulm@primefinancial.com.au
Jade Nicholls – jaden@primefinancial.com.au
Stuart Thomson – stuartt@primefinancial.com.au

This post is provided by Prime Accounting and Business Advisory Pty Ltd. Liability limited by a scheme approved under Professional Standards Legislation. This post is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this post. All information is subject to change without notice. We and each party providing material displayed in this post disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of information or material in this post. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

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