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  • Closely held payees

    Small employers (19 or less employees) with closely held payees are exempt for the 2019–20 financial year and therefore do not need to be reported. They will need to be reported through STP from 1 July 2020 and you will have the option to report their closely held payee information quarterly.


    Only closely held payees are eligible for this reporting concession. A closely held payee is one who is not at arm’s length.

    This means they are directly related to the entity from which they receive payments for example:

    • family members of a family business
    • directors or shareholders of a company
    • beneficiaries of a trust.

    All arm’s length employees of the entity must still be reported on or before pay date (the statutory due date)

    Quarterly STP report due date

    If you report quarterly, you will need to send your STP report once per quarter for the closely held payees at the same time you lodge your activity statement.

    The due date for lodgment will be the due date of your activity statement. You can also speak with your registered agent about your activity statement due date.

    See also:

    How to lodge the quarterly STP report

    The STP report needs to be lodged through an STP-enabled solution. You can either lodge the report yourself or have your registered agent do this on your behalf.

    The STP report cannot be lodged through ATO portals and is not an additional label on the activity statement.

    See also:

    Payments included in quarterly report

    You will need to make a reasonable estimate of a year-to-date amount for payments paid to your closely held payees up to and including the last pay day of the quarter.

    Speak to your solution provider or tax professional to see how they are offering quarterly reporting.


    For the July to September period you need to report your closely held payees’ year-to-date amount up to and including 30 September.

    End of example


    How to calculate the amount

    You can calculate these amounts using one of the following methods.

    • Withdrawals taken by the payee (but do not include payments of dividends or payments which reduce liabilities owed by the business to the closely held payee).
    • Calculating 25% of the total salary or director fees from the previous year or the year of the last lodged tax return of the closely held payee.
    • Vary the previous years’ amount (to take into account trading conditions) within 15% of the total salary or directors fees for the current financial year.

    These methods are similar to the way you would calculate pay as you go (PAYG) instalments.

    Reporting more frequently

    If you would like to report more frequently (such as monthly) you can do so. You should report this monthly pay event on the 21st day of the following month (this is the same due date as monthly activity statements).

    Finalisation declaration due dates

    If you choose to report closely held payees quarterly you will have up to the due date of your income tax return to finalise the information you’ve reported for the year and make any adjustments to reported amounts.

    Speak to your tax professional for information about your due date.

    Notifying us of your closely held payees

    You do not need to apply for this concession, however you will need to notify us of your closely held payees for the 2020–21 financial year.

    Last modified: 19 Jun 2019QC 59387