The ATO have given the option for small and micro employers to report anytime between 1 July 2019 to 30 September 2019. To ensure a smooth transition into Single Touch Payroll reporting, the ATO has provided flexible options for micro employers. Before we discuss the options for micro employers you need to distinguish if you are a small or a micro employer.
What is the difference between a Small Employer and a Micro Employer?
You are classified as a small employer if you employ 19 or less employees. This includes all Full Time, Part-Time, Casual, Seasonal employees in the 2019/2020 financial year.
You are classified as a micro employer if you employ between 1-4 employees. This includes all Full Time, Part-Time, Casual, Seasonal employees in the 2019/2020 financial year.
How to distinguish if you are a small employer or a micro employer.
You will need to complete an employee headcount to distinguish what type of employer you are. You will need to exclude the following from your employee headcount:
All types of employees who ceased work before the 1 July 2019.
Staff hired through a third-party agency, and you do not provide/transfer payments directly to individual staff. Instead, the payment is made through the agency.
Contractors are not required to be included in the employee headcount, as published on 20/03/2019 on the ATO website.
It is important to distinguish between an employee and a contractor. Use the ‘Employee/Contractor Decision Tool’ to help distinguish the difference between the two categories.
Please note: If you are a contractor, you will need to speak to your accountant regarding STP reporting.
STP Reporting options for Micro Employers
As a micro employer you can report payroll yourself each pay run or you can report quarterly until June 2021 through your chosen registered tax or BAS agent. However, to report quarterly you must be one of the following:
You are a non-computerised business.
Your business has irregular employment patterns.
You are an employer of closely held payees. - this refers to family members who are employed. For more info on closely help payees visit the ATO website.
Both of the following must also be met:
All amounts owing to the ATO are either not yet due or subject to a payment plan.
All lodgement obligations are either not yet due or subject to deferral.
If you meet the above criteria, talk with your registered tax agent / accountant on what option is best for you.
Your farm business, or your BAS agent will still need to use an STP approved financial software to submit the report to the ATO.
Ensure your employees have a MyGov account to facilitate their individual tax returns as Payment Summaries become obsolete once STP is implemented.
If you have more questions and require additional advice regarding STP watch the ATO Q&A Webinar provided by Agrimaster.