QB Issue Resolution:

Yes you will need to set up STP, you can use the following guide for assistance on this: https://quickbooks.intuit.com/community/Payroll-and-STP/How-do-I-enable-Single-Touch-Payroll/m-p/278…

Resolution for Issue 'Do we have to use STP if we have only have one standard employee and the other two employees are considered “closely held”?' available: Yes (Solved).
Source: Intuit Community forum.

Do we have to use STP if we have only have one standard employee and the other two employees are considered “closely held”?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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