Changes to STP Reporting Concessions from 1 July 2021

Certain employers had special Single Touch Payroll Concession prior. However, after 30 June 2021, these concessions will end and employers will have to change how they perform STP. The following changes effective 1 July 2021 include:

Small Employers (19 or Fewer Employees)

Small employers currently have no obligation to report ‘closely held’ payees (people who are directly related to the entity such as relatives, directors, or shareholders of an entity) through Single Touch Payroll (STP). However, they will have to report payments made to said ‘closely held’ payees. No changes are made to the reporting of regular employees. Actual payments to closely held payees can be reported using STP via the following options:
1. On or before the payment date;
2. On or before the due date for the employer’s quarterly activity statements; or
3. Report a reasonable estimate quarterly on or before the due date for the employer’s quarterly activity statements

Employers with only closely held payees have until the due date of the payee’s tax return to make a finalisation declaration. Employers will need to discuss with their payees regarding the due dates of individual income tax returns.

Micro Employers (4 or Fewer Employees)

These employers are currently allowed to use a quarterly reporting option. Following the new Financial Year, this concession will only be considered for micro employers experiencing exceptional circumstances. These include, but are not limited to, natural or other disasters, serious illness or death, seasonal or intermittent workers, or unreliable internet access. The ATO will consider other circumstances individually and determine whether a micro employer is eligible for the continuation of this concession.

Registered agents must apply for this concession and lodge quarterly STP reports on behalf of their eligible clients. STP reports are due on the same day as the employer’s quarterly activity statements. If a monthly reporting basis is preferred by the employer, then the STP reports must be lodged on or before the 21st of each month. Finalisation declarations are due by 14 July yearly.

Paper PAYG and GST quarterly instalment notices

The ATO during the past year has attempted to digitize activity statements. However, after receiving feedback regarding issues with this program, the ATO has decided to issue paper PAYG and GST quarterly instalment notices starting with the March 2021 notice. The ATO will continue to work to develop a digital solution for the paper notices to ensure a more simpler tax reporting procedure with taxpayers.

Avoid Disqualification from Superannuation Guarantee Amnesty

The aforementioned Amnesty expired on 7 September 2020. Employers who have not disclosed unpaid SG amounts must, within 21 days of being notified, pay outstanding amounts owed, or set up a payment plan to avoid disqualification and losing the benefits. Registered agents can assist clients who qualified for the amnesty by setting up a payment plan on the client’s behalf if they have an existing debit amount under $100,000; does not have a payment plan for that debit amount; and has not defaulted on a payment plan more than twice in the past two years. Employers who are disqualified from the amnesty will:

• Be notified in writing regarding the relevant quarter they are disqualified for
• Be charged an administration fee of $20 per employee for each disqualified quarter
• May be decided an additional penalty of up to 200% of the unpaid SG amount)
• Be issued a notice of amended assessment.

Employers who continue to qualify for the amnesty can only claim a tax deduction for the amounts paid on or before 7 September 2020.

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The material and opinions in this article are those of the author and not those of AP Group. The material and opinions in the article should not be used or treated as professional advice and readers should rely on their own enquiries in making any decisions concerning their own interests or resort to professionals for assistance.