What is a closely held employee in regards to STP?

According to the ATO, a closely held employee is: A closely held payee is one who is not at arm’s length. This means they are directly related to the entity from which they receive payments, for example: family members of family business directors or shareholders of a company beneficiaries of a trust.

For more information on closely held employee's visit the ATO's factsheet here: https://www.ato.gov.au/Business/Bus/Single-Touch-Payroll-for-closely-held-employees-factsheet/