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Taxation Administration – Single Touch Payroll –2020-21 year Withholding Payer Number Exemption 2020

Taxation Administration – Single Touch Payroll –2020-21 year Withholding Payer Number Exemption 2020

Administered by Department of the Treasury

Legislation au F2020L00801 Not in force Legislative Instrument

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Explanatory Statement

Taxation Administration – Single Touch Payroll –2020‑21 year Withholding Payer Number Exemption 2020

General Outline of Instrument

This Taxation Administration – Single Touch Payroll – 2020‑21 year Withholding Payer Number Exemption 2020 instrument is made under subsection 389‑10(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA).
This instrument exempts certain entities that do not have an Australian business number (ABN) but instead have a withholding payer number (WPN) from reporting under Single Touch Payroll (STP).
This instrument is a legislative instrument for the purposes of the Legislation Act 2003.
Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Date of effect

5. This instrument commences on 1 July 2020.

6. For the purposes of subsection 12(2) of the Legislation Act 2003 this instrument does not adversely affect the rights or liabilities of any person other than the Commonwealth.

What is the effect of this instrument

7. This instrument provides an exemption to any entity that:

(a) pays an amount referred to in Column 1 of the table in subsection 389‑5(1) of Schedule 1 to the TAA

(b) does not have an ABN, and

8. Entities within this class will be fully exempt from the requirement to report under section 389‑5 of Schedule 1 to the TAA for the 2020‑21 financial year.

9. The effect of this instrument is to extend the class exemption for relevant entities, provided by Taxation Administration – Single Touch Payroll – Exemption for Employers with a Withholding Payer Number (F2019L00437) legislative instrument, registered on 28 March 2019 for an additional financial year.

10. As a result, the relevant entities will be exempt from section 389‑5 of Schedule 1 to the TAA for the 2018‑19, 2019‑20 and 2020‑21 financial years.

11. Any entity covered by this exemption may still choose to report under STP in accordance with Division 389 of Schedule 1 to the TAA notwithstanding the exemption provided by this instrument.

12. Compliance cost impact: Minor – There will be minimal impact for both implementation and ongoing compliance costs. The legislative instrument is minor and machinery in nature.

Background

13. Division 389 of Schedule 1 to the TAA establishes STP reporting. Section 389‑5 of Schedule 1 to the TAA provides for the reporting of certain amounts by employers to the Commissioner.

14. Subsection 389‑10(1) of Schedule 1 to the TAA allows the Commissioner of Taxation to exempt by way of legislative instrument a class of entities from reporting under STP.

15. Subsection 389‑5(5) of Schedule 1 to the TAA provides that section 389‑5 does not apply to any entity to the extent (if any) that the entity is covered by an exemption under section 389‑10 for the year in which the entity’s conduct occurs.

Consultation

16. For this instrument, broad public consultation was undertaken for a period of 4 weeks to 14 May 2020.

17. The draft instrument and draft explanatory statement were published to the ATO Legal database. Publication was advertised via the ‘What’s new’ page on that website, and via the ‘Open Consultation’ page on ato.gov.au. Major tax and superannuation publishers and associations monitor these pages and include the details in the daily and weekly alerts and newsletters to their subscribers and members. This ensures advice of the draft is disseminated widely across the tax professional community, and that they are in an informed position to provide comments and feedback.

18. No comments were received as a result of the consultation.

Legislative references:

Acts Interpretation Act 1901

Human Rights (Parliamentary Scrutiny) Act 2011

Legislation Act 2003

Taxation Administration Act 1953

Statement of Compatibility with Human Rights

This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Taxation Administration – Single Touch Payroll –2020-21 year
Withholding Payer Number Exemption 2020

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Commissioner will afford an exemption to entities that have a withholding payer number (WPN) from reporting under Single Touch Payroll (STP) for the 2020-21 financial year. This will provide extra time to update software so that these entities can be compliant with the STP reporting requirements.

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms because it is of a minor or machinery nature as it provides certain entities with an exemption from a reporting requirement for the 2020-21 financial year.

Conclusion

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Taxation Administration – Single Touch Payroll – 2020-21 year Withholding Payer Number Exemption 2020, made under subsection 389-10(1) of Schedule 1 to the Taxation Administration Act 1953, addresses a gap in the reporting requirements for entities that do not have an Australian Business Number (ABN) but have a withholding payer number (WPN). The instrument, enacted by the Australian Government and commencing on 1 July 2020, exempts these entities from Single Touch Payroll (STP) reporting for the 2020-21 financial year. This exemption extends the class exemption provided by a previous legislative instrument, covering the 2018-19, 2019-20, and 2020-21 financial years, thereby giving entities with a WPN additional time to update their software and comply with STP reporting requirements. The exemption is of a minor and machinery nature, with minimal impact on compliance costs.

Scope and Application

The Taxation Administration – Single Touch Payroll – 2020-21 year Withholding Payer Number Exemption 2020 instrument, made under subsection 389-10(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA), exempts certain entities that do not possess an Australian Business Number (ABN) but have been assigned a withholding payer number (WPN) by the Australian Taxation Office (ATO) from the requirement to report under Single Touch Payroll (STP) for the 2020-21 financial year. This exemption extends the exemption granted by the Taxation Administration – Single Touch Payroll – Exemption for Employers with a Withholding Payer Number (F2019L00437) instrument for an additional year, providing relief to eligible entities for the 2018-19, 2019-20, and 2020-21 financial years. Eligible entities are those that pay amounts as specified in Column 1 of the table in subsection 389-5(1) of Schedule 1 to the TAA, do not have an ABN, and have a WPN for pay-as-you-go withholding purposes. While the exemption applies nationally, the instrument is a legislative instrument under the Legislation Act 2003, and compliance costs are expected to be minimal due to its minor and machinery nature.

Key Provisions

The key provision of this legislation, the Taxation Administration – Single Touch Payroll – 2020-21 year Withholding Payer Number Exemption 2020, is the exemption granted to certain entities from reporting under Single Touch Payroll (STP) for the 2020-21 financial year. The exemption applies to entities that pay amounts referred to in Column 1 of the table in subsection 389-5(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA), do not have an Australian Business Number (ABN), and have been assigned a withholding payer number (WPN) by the Australian Taxation Office (ATO) for the purposes of pay as you go withholding (subsection 7). This exemption extends the exemption provided by the Taxation Administration – Single Touch Payroll – Exemption for Employers with a Withholding Payer Number (F2019L00437) legislative instrument, registered on 28 March 2019, for an additional financial year. However, entities covered by this exemption may still choose to report under STP in accordance with Division 389 of Schedule 1 to the TAA (subsection 11). The exemption is intended to provide extra time to update software so that these entities can be compliant with the STP reporting requirements. The obligations imposed by this legislation on the entities it governs are minimal. Essentially, entities that meet the criteria for the exemption are not required to report under STP for the 2020-21 financial year. However, they are still free to choose to report under STP if they wish, and they must ensure that they have the necessary WPN to do so. The legislation also requires the Commissioner of Taxation to exempt these entities from reporting under STP, as provided for in subsection 389-10(1) of Schedule 1 to the TAA. There are no specific offences, penalties, or civil/criminal consequences for breach of this legislation. However, entities that fail to comply with the STP reporting requirements may be subject to penalties under other provisions of the TAA. For example, failure to report under STP may result in a penalty of up to $2,100 per employee per reporting period (section 389-50 of Schedule 1 to the TAA). Additionally, entities that fail to report under STP may be subject to other penalties, such as fines or imprisonment, under other provisions of the TAA or other legislation. The maximum penalties for these offences vary depending on the specific provision and the circumstances of the breach.

Area of Law: Taxation Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Exemptions & Exclusions; Compliance Obligations

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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