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  • Exemptions

    Under Single Touch Payroll (STP) there are reporting exemptions for a particular financial year or for certain types of employers, employees and payments.

    If you are exempt from STP reporting, you must continue to comply with your existing pay as you go (PAYG) withholding obligations, including:

    • reporting and paying your PAYG withholding and super guarantee liabilities
    • giving payment summaries to your employees
    • giving a payment summary annual report to us.

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    Exemptions for certain payments

    There are exemptions from reporting certain payments for the following circumstances.

    Long service leave and redundancy schemes

    Employers in certain industries, such as building, construction or cleaning, may make regular contributions to a long service leave or redundancy scheme for their employees. Employees who are members of the scheme may be entitled to payment of long service leave, or a termination payment, if certain conditions are met.

    If you're an administrator of one of these schemes, and you don't use STP-enabled software to manage these payments to members, you are exempt from reporting these payments through STP until the end of the 2020–21 financial year. You will need to start reporting these payments through STP from 1 July 2021.

    You need to report your own employees' tax and super information through STP.

    If you decide to make use of this exemption, you don't need to apply to us or advise us. However, you should keep records that support your decision.

    Exemptions for certain employers

    Employers with a withholding payer number (WPN) are exempt from STP reporting for the 2018–19, 2019–20 and 2020–21 financial years. You will need to start reporting these payments through STP from 1 July 2021.

    If you decide to make use of this exemption, you don't need to apply to us or advise us. However, you should keep records that support your decision.

    Exemptions for certain payees

    There are exemptions for payees for the following circumstances.

    Closely held (related) payees

    Small employers with 19 or fewer employees are exempt from reporting closely held payees through STP until 1 July 2021.

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    If you need an exemption that's not listed

    We will consider granting an exemption for reporting through STP for:

    • a financial year
    • a particular employee or group of employees.

    Small employers with 19 or fewer employees may be exempt from STP reporting if they meet any of the following criteria:

    • no or low digital capability
    • no or unreliable internet service
    • other special circumstances.

    Employers who run their business in an area with no internet service can seek an exemption for one or more financial years.

    A registered tax or BAS agent can apply for an exemption on an employer's behalf.

    How to apply

    You or your registered agent can submit an exemption request online. If you are unable to access online services, you can phone us on 13 28 66.

    To submit a request for an exemption online:

    • In the Business Portal – Select Manage employees then STP deferrals and exemptions.
    • In Online services for agents – Select the client then Business then STP deferrals and exemptions.

    In each case, include the following information:

    • the number of employees on your payroll – this will help us understand the size and complexity of your business
    • the reasons why you are unable to report through STP
    • any steps you have taken to attempt to get ready for STP
    • any supporting evidence that may help us understand your circumstances.

    If you are requesting an exemption for reporting a particular employee or group of employees, provide:

    • the details of the employee
    • the nature of their employment
    • any supporting evidence.

    We may contact you for further information about your request.

    Previous exemptions

    These exemptions were offered in previous financial years but are no longer available.

    Insolvency practitioners – weren't required to report through STP on their employer clients' behalf in 2018–19. They are required to start reporting through STP from 1 July 2019.

    Inbound assignees – we are considering future concessional reporting arrangements for these types of employees. Further guidance will be available soon.

    Under the previous arrangements, you may have been exempt from reporting payments to inbound assignees for the 2018–19 financial year if all of the following applied:

    • the employee was employed by an offshore entity – for example, an entity that is non-resident for Australian taxation purposes
    • the employee was seconded to Australia
    • all or part of the employee’s base salary and other remuneration was paid by an offshore entity
    • you maintained a shadow payroll arrangement for the employee – for example, a notional payroll for the purposes of tax and social security obligations and internal tax equalisation and protection policies.

    Any employee that did not meet all the criteria had to be reported through STP.

    See also:

    Last modified: 26 Jun 2020QC 56187