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Closely Held Employees

Mark_9766087

It is my understanding that wef 1/7/21 businesses are required to report closely held employees and can do so at time of each pay event.

We use Reckon Customer Portal for STP reporting of each pay event.

I have just upgraded to Reckon Accounts 2021 R2 and was expecting to see an option or box available in individual employee records in Hosted to indicate a closely held employee, but cannot see any change.

Accordingly, how do we report closely held employees to the ATO when processing STP for each pay event?

Thanks

Comments

Acctd4

I’m not sure I’m clear on your query. Do you have existing employees that you’ve been reporting via STP? Are the closely-helds already set up in your Reckon file as employees?

Mark_9766087

Thank Shaz for your response.

Yes, we have existing employees and been reporting STP through the Reckon portal,

and Yes the closely held employees are already set up in reckon Accounts.

It is my understanding that the mandatory reporting of closely held employees relates to the ATO being able to identify who is a closely held employee, otherwise how are they going to know ... or am I missing something?

PS: I note, you are in Perth, so are we.

Acctd4

Yes, am in the West too :)

No, you're not missing anything - There's no specific tag/indicator within the payroll itself, it's just an ATO compliance change 😊

Bruce

Just make sure that you haven't checked the "exclude from Payment Summary and STP" in the edit employees window.

Mark_9766087

Ok, I think I need to clarify.

Exclude from Payment Summary and STP are unchecked ... I have been and exporting to and reporting STP through the Reckon Customer Portal without any problems whatsoever.

My question is how do I comply with the ATO requirement from 1/7/21 for business to report closely-held employees? ... I would have thought reporting through STP via the Reckon Customer portal would have been the way. But in order to do so closely held employees would have to be identifiable in Hosted I imagine.

Maybe I need to contact the ATO and ask them, as it seems STP through Reckon won't meet that requirement.

Acctd4

Mark, as previously advised the ATO doesn't require specific identification of Closely-Helds, just that they be included in STP submissions from the specified date. As long as you are creating Paycheques for them along with your other employees, they will be in your STP submissions.

Mark_9766087

Oh ok, I understand that answer.

Thanks Shaz for you assistance.

Michael77

Hi,

I can't see any tab to enter data for monies disbursed from a Trust to the beneficiaries in the payroll function. Under the new 'closely held payees' legislation applicable 1st July 2021 for all micro businesses under 19 employees any disbursements / monies withdrawn from the business trust account to the beneficiaries must be recorded under a title:

'closely held payees'

I have spoken with Reckon help desk and they advise there is no facility for this in the STP reports / data , only wages & salaries tabs .

Spoke with three different people at the ATO this morning and they advise that any amounts withdrawn cannot be classified as wages or salary and that I have to find a STP software provider that has the facility as they need to have the payments classified as payments to ' closely held payees' within the STP system.

Does anyone know if there will be an upgrade to the payroll function to allow for this STP ATO reporting requirement for

' closely held payees ' Thanks Michael

sheelagh

Yes can we report closely held employees in Hosted otherwise how will the ATO know they are closely held employees ?

Surely there is a facility for this in Reckon ?

thanks

Sheelagh

Acctd4

I think there has been considerable confusion regarding Closely Held Payees & STP.

Drawings & distributions are NOT part of the new legislation! Only payments classified as "Wages" or "Directors Fees" actually need to be reported via STP (which is why the Payroll within Reckon only caters for these!)

You can find current info from the ATO on this here:

https://www.ato.gov.au/business/single-touch-payroll/concessional-reporting/closely-held-payees/

Bruce

@sheelagh the advice I have been given is that the new requirements mean that "closely held employees" now need to be treated the same as other employees (noting Shaz's comment re drawings & distributions). There is no obligation under STP to "say to the ATO that member X is a closely held employee" . Hence it is not a necessity for any of the accounting software systems to hold this information.

Lorimer

Look at the 'CHP' row in the table near the top of https://www.ato.gov.au/Business/Single-Touch-Payroll/In-detail/Single-Touch-Payroll-Phase-2-employer-reporting-guidelines/?page=4#Reporting_the_amounts_you_have_paid. Contrary to some of the commentary above, the ATO says in that table, 'If you have 19 or fewer employees and are using the concession available for reporting closely held payees through STP in relation to the individual, then you must use this income type [i.e. CHP] to tell us that you're using the concession.' (My emphasis.)

Reckon Payroll still doesn't include CHP as an option.

Rav

Hi @Lorimer

The link you've provided looks to be related to Single Touch Payroll phase 2. All Reckon payroll software is currently exempt from STP phase 2 requirements until 1 January 2023, there's more info on this below

https://www.reckon.com/au/support/stp-phase-2/

We'll have further updates and info around STP Phase 2 and our software later this year.

Lorimer

Thanks, Rav. That explains the discrepancy with the ATO website. Like others, I searched for help about closely held payees but the deferral for Reckon users didn't come up.

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