Key Points

• Business owners can use the basic method to calculate fuel tax credits for diesel used in heavy vehicles, if you claim less than $10,000 each year.
• You can use this method for diesel acquired on or after 1 October 2020.

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The ATO has confirmed that as of 1 July 2021, Single Touch Payroll (STP) reporting for closely held payees will commence, after having granted these employers a one-year exemption.

The ATO have now confirmed that small employers can report payments to closely held payees through STP in three ways:

• reporting actual payments in real time
• reporting actual payments quarterly
• reporting a reasonable estimate quarterly

Reporting Actual Payments in Real Time

In the first scenario employers will be required to report actual payments in real time.  This is in line with how employers would report information on their arm’s length employees through STP, on or before each pay day.

Reporting Actual Payments Quarterly

The second option, to report actual payments on a quarterly basis, and will be due on or before the due date for quarterly business activity statements (BAS).

Reporting a Reasonable Estimate Quarterly

The final option, to report a reasonable estimate quarterly, will allow employers to report quarterly amounts that are equal to or greater than 25% of the payee’s total gross payments and tax withheld from the previous finalised payment summary annual report (PSAR).

These options mean employers who commonly determine salaries, wages or directors’ fees after the end of the financial year, will need to carefully consider the implications.  

This approach allows a concessional approach to reporting the information through STP, and as far as PAYG withholding is concerned, employers have the ability to adjust (post-year-end) subject to the imposition of general interest charges (GIC).

While a finalisation declaration for arm’s length employees is required by 14 July each year, the ATO will allow employers with closely held payees up to the due date of the payee’s income tax return to make a finalisation declaration.

Further, the ATO will not impose any ‘failure to withhold’ penalties, so long as employers have complied with this reasonable quarterly estimate.  However, there will be a general interest charge if you have not met your SG obligations and SGC liabilities.

The ATO also notes that STP reports will need to be lodged through an STP-enabled solution and cannot be lodged through the ATO portals or through a BAS.

If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.