A business may no longer be required to lodge single touch payroll (STP) reports for a number of reasons.
These are if your business no longer has employees, has ceased trading, has changed structure, is not paying employees for the rest of the year, or has paused due to COVID-19. Depending on your business’s situation and circumstances, what you need to do may be different.
No longer employing staff
If you cease employing staff and continue trading without employees, you must submit a finalisation declaration to the ATO for all your employees as part of your STP reporting.
Once you do this, the ATO will pre-fill the employees’ income tax returns and display the information as “tax ready” in their myGov at the end of the financial year. You can make a finalisation declaration at any time during the financial year when you have ceased employing.
When you have finalised your STP obligations, you can cancel your pay-as-you-go (PAYG) withholding registration to let the ATO know that you are no longer employing staff.
If you are a sole trader, the requirements will be different. Ask TNR for guidance if this is your situation.
Closing a business
If you are ceasing trade, before you close your business and cancel your Australian business number (ABN), you must bring all your lodgement obligations up to date, including STP reporting.
As part of your STP reporting, you will need to make an STP finalisation declaration for all of your employees. Once you do this, the ATO will pre-fill the employees’ income tax returns and display the information as “tax ready” in their myGov at the end of the financial year.
You can make a finalisation declaration at any time during the financial year. When you have finalised your STP obligations, you can cancel your PAYG withholding registration to let the ATO know that you are no longer employing staff. Once this is done, you should cancel your goods and services tax (GST) and ABN registrations so the ATO knows you have ceased trading. Of course we can help you with all of this.
It is important that you finalise all outstanding STP reporting before you cancel your ABN and your software subscription, in order to meet your STP obligations. If you’re a company but no longer carry on a business, you can choose to keep your ABN registration. However, you must cancel your GST and PAYG withholding registration and lodge an STP finalisation declaration.
Changes to your business structure
If your business structure changes, the ABN and branch under which you have been generating your STP reporting may change. If this occurs, you must:
- finalise your STP reporting under the ABN and branch you have been using for your STP reporting
- start your STP reporting under the new ABN and branch using zero year-to-date employee amounts.
! It is important to finalise your STP reporting under the ABN and branch before you lose access to it, or it is cancelled or deregistered.
No payments to employees for the rest of the year
If you won’t be paying any employees for the rest of the financial year, or for a period greater than your reporting obligations, you should lodge a “No requirement to report” notification. To do this, lodging via the ATO’s Business Portal, select: “Manage employees”, then “STP deferrals and exemptions”, and select “No requirement to report”.
Pausing your business due to COVID-19
If your business has been paused due to COVID19 and, at present, you are not employing and not receiving JobKeeper payments, you should lodge a “No requirement to report” notification (as per the above process).
These are those who commenced employment between 7 October 2020 and 6 October 2021; were aged between 16 and 35 years at the time they commenced employment; have worked an average of 20 hours a week for each whole week the individual was employed by the qualifying entity during the JobMaker period.
Additionally the worker must have met the preemployment condition, which requires that for at least 28 of the 84 days (that is, for 4 out of 12 weeks) immediately before the commencement of employment of the individual, the individual was receiving at least one of the following payments:
- parenting payment
- youth allowance (except if the individual was receiving this payment on the basis that they were undertaking full time study or was a new apprentice), or
- JobSeeker payment.
Note that the new worker must be in a genuine employment relationship. For example, “non-arm’s length” employees will not be considered eligible employees. This includes family members of a family business, directors of a company and shareholders of a company.
Participation and notification requirements
To be entitled to the JobMaker Hiring Credit payment in relation to a JobMaker period, employers must have notified the Commissioner in the approved form of its election to participate in the scheme no later than by the end of the period that the entity first elects to participate. For example, for an entity that elects to participate for the JobMaker period of 7 January 2021 to 6 April 2021, the notice must be provided to the Commissioner by 6 April 2021.
The reporting requirements will include the details of employees that have commenced or ceased employment during a JobMaker period and the entity’s payroll amount. The Commissioner will also specify that the information must be provided through the STP.
Please contact the TNR team if you have any queries related to Single Touch Payroll.