Super for closely held employees¶

Family businesses often pay family members who work in the business. A family member on the payroll is what the ATO calls a closely held payee. It can be tempting to treat their pay more casually than a stranger's — but for super, the rules are much the same as for anyone else.

A closely held payee is a person who is directly related to the business paying them. The ATO gives examples such as family members of a family business, directors or shareholders of a company, and beneficiaries of a trust.

In one line

Closely held employees, such as family members, are generally entitled to super like any other employee. The closely held label mainly changes some reporting timing, not the underlying super entitlement.

Why this matters¶

In a family business it is easy to think, "it's all family money anyway, so super for my son doesn't really matter." But if a family member is a paid employee and meets the usual rules, their super still needs to be paid. Skipping it can leave the business owing that super later, along with extra charges — and it short-changes the family member's retirement savings. Treating family members on the payroll the same as any other employee keeps things clean.

What you will learn¶

Who a closely held payee is
Why closely held employees are generally entitled to super
What the "closely held" label actually changes

Understanding the concept¶

If a closely held payee is a paid employee who meets the usual super rules, they are generally entitled to super just like any other employee. The ATO is clear that employers must still make super guarantee contributions for closely held payees.

So what does the "closely held" label change? Mainly some reporting timing. Small employers report pay to the ATO through Single Touch Payroll (STP). For closely held payees, small employers get some flexibility on how often they report those amounts — for example, they may be able to report them less frequently rather than on every payday.

The important point is that this flexibility is about reporting, not about paying super. The super entitlement itself works the same as for any other employee.

For accountants & bookkeepers

The STP concessions for closely held payees affect reporting frequency and end-of-year finalisation timing — not the super guarantee obligation. The ATO states that super guarantee contributions for closely held payees are still due, and that the reporting concessions do not extend to the payment of super. Super is worked out on the payee's ordinary time earnings at the current rate, the same as for arm's-length employees. Confirm the current reporting-frequency and finalisation dates against the ATO's closely held payees guidance before advising, as these dates and Payday Super timing can change.

Example¶

Leo is 22 and works full time in his parents' family business, which pays him a wage each fortnight. Leo is a closely held payee because he is directly related to the business.

Even though Leo is family, he is a paid employee who meets the usual rules, so the business works out his super on his ordinary time earnings at the current rate and pays it to his fund by the due date — exactly as it would for a worker who is not related. The only real difference is that the business may have some flexibility in how often it reports Leo's pay to the ATO. The super itself is not optional.

Common mistakes¶

Skipping super for family members on the payroll — a paid family member who meets the rules is generally entitled to super.
Confusing the reporting flexibility with a super break — the concession is about reporting, not about whether super is paid.
Paying family members "off the books" — if they are employees, super and records still apply.

How this works in myaccountant¶

In the app — you set up a family member or other closely held payee as an employee, the same as any other staff member. When you run a pay run, myaccountant works out their super, records it, and helps you pay it to their fund by the due date, so the family member is not left out.

Key points¶

A closely held payee is someone directly related to the business, such as a family member.
Closely held employees are generally entitled to super like any other employee.
The "closely held" label mainly affects some reporting timing.
The reporting flexibility does not remove the obligation to pay super.
Family businesses should not skip super for family members on the payroll.

Learn next¶

General information only — not tax, super or financial advice.

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