Posts Categorized: BAS and super obligations

Single Touch Payroll

Single Touch Payroll will apply to all employers from 1^st July 2019. Whilst extensions have been offered we recommend not relying on them in the majority of cases as it will create more work later.

There are a number of things to do and matters that as an employer you need to have in order before July. Keep an eye out for notification of our upcoming webinar.

In that webinar we will set out the when, what, why and how of Single Touch Payroll.

We look forward to seeing you then.

Upcoming March quarter deadlines

For those of you who are employers, Friday 26^th April is the end date for satisfying your SG super obligation for the March quarter. Late payments will attract interest and penalties. As such, this obligation is an employer’s most important commitment so best not to leave it until the last minute; particularly as payments through some super clearing houses take 5 days or more to clear.

For those who lodge a paper (non-electronic) quarterly BAS or IAS, your March quarter activity statement is due to be lodged by Monday 29^th April.

Personal services entities

If you have a personal services entity (you will know if this relates to you as we will have discussed this with you many times over the years), your entity will be required to pay at least 80% of its income to you as salary/wage and remit the tax thereon within this BAS.

Lodgement tip

Please note that lodgement of an activity statement (even if it is nil statement) and payment are two separate requirements. Late lodgement attracts a minimum non-deductible fine of $210 for every 28 days that a form is lodged late whereas as late payment results in an interest levy. More importantly, BAS’s and SG super which is not reported and remains unpaid after 3 months becomes a personal debt of directors (please refer to the September 2012 edition of Tips and Traps for further details on the Directors Penalty Notices system) – and the ATO are actively issuing DPN notices. That said, the ATO are agreeable to entering into payment arrangements.

STP reminder

And a quick reminder about Single Touch Payroll (STP). STP will be mandatory for all employers from July 2019. You will shortly receive an introductory letter which will be followed by a series or reminders and steps to be implemented before 30^th June.

Receipt Bank – another way to better help you

We are always looking for ways to make your life easier.

Our latest initiative is Receipt Bank, a tool which allows a more automated bookkeeping workflow, solves typical specific compliance problems and serves as a back-up system. It does so in a most cost effective manner.

Receipt Bank allows you to upload your business receipts, invoices and expenses into your software or provide them to us seamlessly and easily. You can do so via photo on a mobile app downloaded to your smart phone or via personalised @ Receipt Bank email address.

The twelve main benefits from using Receipt Bank:-

You save time on sending in your paperwork, time that you can spend on your core business services or more time not attending to paperwork.
You can use up to any one or combination of four methods to submit information to Receipt Bank.
The two main methods are taking a photo on your mobile phone or on-forwarding an e-mail.
It is great solution to those who incur lots of costs on the road whether it be coffee meetings or receipts from Bunnings that are paid by cash or credit card.
You limit the number of questions we ask.
You don’t have to forage for receipts from up to 23 months ago.
You save space as there’s no need to retain your physical documents (if you so wish), with all documents easily searchable and securely stored on the cloud.
Or you can still keep those physical records but sleep easy in the knowledge that you have a back-up. Furthermore, you can rest easy knowing that your data is stored securely and encrypted.
You now have real time information flowing into your accounting system, which allows us to provide you with better and more timely insights to improve your business. Receipt Bank works best with Xero and QuickBooks Online.
No more lost receipts & invoices! No more paying too much tax or GST because you lost invoices and receipts.
You can access your records from anywhere anytime.
You can also rest easy in the knowledge that you have read only access after your business has ceased operating.

We welcome your call so e can explain the benefits to you – and other ways we can both simply and improve your life.

Single Touch Payroll exemptions

Single Touch Payroll has now been legislated to apply to all employers from July 2019. So from 1^st July, 2019, all employers must notify the Tax Office of every employees gross pay, tax and super at the time of payment.

Some exemptions and deferrals have been granted.

However, you shouldn’t need them. The main accounting software products offer Single Touch Payroll solutions. Furthermore, there is much preparatory work for which you will need to change and or improve your processes. It is not something bets left to deal with later.

Keep an eye out for future educational and preparatory steps.

Employment – ATO & unpaid super

The ATO is getting serious about unpaid employee SG super.

Legislation passed last week means employers can be forced to attend educational courses and even be jailed. The ATO will also have the power to issue what are called Director Penalty Notices (DPNS). DPNs make unpaid SG super a personal liability of a director.

The government is greatly concerned about the amount of unpaid SG super. It has now given the ATO the weaponry to address non and under compliance. And from July with the expansion of Single Touch Payroll to all employers, the ATO will know which employers to track down.

Speak to us if you need help with your payroll.

What GST to charge on food and drinks?

We often get asked by our food and hospitality clients what GST to charge on food and drinks.

Sounds easy but its frequently not.

Thankfully the ATO have created a search tool which you can find at:-

ATO GTS food and drink search tool

We help a number of clients within food and hospitality and would welcome the opportunity to uncover the ways in which we can help you. We can also show you our real time reporting food and hospitality dashboard (which is full on financial and non-financial KPI’s).

Single touch payroll for small businesses

Single touch payroll for small businesses is not far away.

Come July 2019, every small business in the country will need to report their payroll to the ATO at the time of payment. No longer will a business report total wages and tax on an activity statement and then confirm what was paid to whom by issuing PAYG Payment Summaries (group certificates) after year end.

Instead, at the time of payment, a business will need to report to the ATO:-

How much was paid to each employee, and
What the tax withheld was and what super is required to be paid.

This will allow the ATO to better chase up unpaid PAYG Withholding. Moreover, by matching super contributions received as reported by super funds, the ATO will be better placed to chase the almost $3 billion of unpaid SG super. And don’t think the ATO and the government aren’t serious about this. They have already announced an intention to legislate 12 months jail terms for unpaid super (presumably of some significant amount).

Not that directors don’t want to not pay PAYG Withholding and SG super. Since July 2012, PAYG Withholding and SG super unreported and unpaid after 3 months becomes a personal tax liability of a director.

This is not something to be left to July or that last minute.

Please pay attention to our progressive information and training.

The ATO has announced that small businesses don’t need to have a payroll program (and presumably they will release some on line version). But a payroll program will make it easier.

As stated above, we will educate and assist our clients to comply. If you have another accountant, then we welcome the chance to explain to you how we can help you in this area and other ways we can assist you to improve your business and to make you more successful and secure.

You may also wish to watch the following introductory ATO video.

https://www.youtube.com/watch?v=aryD4-MfDjA

Super Guarantee

Friday 26^th October is the end date for satisfying Super Guarantee (SG) super obligations for the September 2018 quarter.

Super guarantee is payable on most forms of remuneration including:-

Commissions.
Bonuses (but see below).
Directors’ fees and all other forms of remuneration to directors.
Allowances (except where fully expended).
Contractors paid mainly for their labour.

But super guarantee is not payable on the following items of remuneration:-

Overtime.
Reimbursements.
Unused annual leave on termination.
Remuneration of less than $450 in a month.
Bonuses that are only in respect of overtime.
Bonuses that are ex-gratia but have nothing to do with hours worked (harder to satisfy than what you might think).
In respect of employees younger than 18.
Employees carrying our duties of a private or domestic nature for less than 30 hours in a week (such as nannies).
On quarterly remuneration greater than $51,620.
Non-residents performing work for an Australian business outside Australia.

SGC super should never be paid late as late payments attract substantial interest and penalties. Furthermore, and SG (and BAS) liabilities that remain unreported and unpaid after 3 months automatically become personal debts of directors.

The SGC rate remains at 9.50%.

Please ensure that you make your payment with sufficient time through your Super Stream gateway. A SG commitment is only satisfied when the money is received by the fund; not when paid to the gateway. Whilst some gateways pay into the respective super funds the next working days (such as the ATO’s free gateway), other gateways take up to 5 working days.

We welcome any question you might have.

SG super

Friday 27^th October is the end date for satisfying Super Guarantee (SG) super obligations for the September 2017 quarter.

SG super is payable on all forms of remuneration including:-

Commissions.
Bonuses (but see below).
Directors’ fees and all other forms of remuneration to directors.
Allowances (except where fully expended).
Contractors paid mainly for their labour.

But excluding the following remuneration:-

Overtime.
Reimbursements.
Unused annual leave on termination.
Remuneration of less than $450 in a month.
Bonuses that are only in respect of overtime.
Bonuses that are ex-gratia but have nothing to do with hours worked (harder to satisfy than what you might think).
In respect of employees younger than 18.
Employees carrying our duties of a private or domestic nature for less than 30 hours in a week (such as nannies).
On quarterly remuneration greater than $51,620.
Non-residents performing work for an Australian business outside Australia.

The SGC rate remains at 9.50%.

We welcome any question you might have.

At MRS, we will spend today planning for your success tomorrow.

PAYG Instalments options

PAYG Instalments are income tax payments paid during the year by companies, super funds and individuals. In respect of individuals, it is levied on income not taxed upon receipt with common examples being interest, dividends and trust distributions. It is not assessed on wages or capital gains. With the September BAS being the first one for the year, one can choose how to calculate your PAYG Instalments.

We usually prefer that clients use the instalment amount method. In the majority of cases, it will not result in an over-payment that can so often arise under the instalment rate method.

In some cases though, the % rate method may enable one to pay a lesser amount. If the instalment income is nil or negligible in the first couple of quarters or much less than the year before, then no or little tax will be paid. A significant payment will only be required at such time as income is received.

It is critical with PAYG Instalments (and indeed GST Instalments) that any downwards or indeed upwards variation be made cautiously. If a variation results in the instalments paid being 15% less than the actual liability then the ATO will issue a fine.

Please do not hesitate to call us should you wish to discuss your own situation.

At MRS, we will spend today planning for your success tomorrow.