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From 1 July 2025, the way you report back payments in Single Touch Payroll (STP) is changing. Previously, only amounts over $1,200 that accrued more than 12 months ago needed to be reported as Lump Sum E. Now, you must report all back payments older than 12 months as Lump Sum E – no matter the amount.
This update comes from the Australian Taxation Office (ATO) and reflects changes to the law around lump sum payments. The ATO will release an updated tax table in June to help you work out how much tax to withhold for these payments – including bonuses and commissions.
It’s important to ensure your payroll system is compliant ahead of the deadline. A registered tax practitioner can also help you manage your reporting and withholding obligations with confidence.
#tax #payroll #smallbusiness
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