Posts Categorized: Employment matters

March super payment reminder

Friday 26^th April is the end date for satisfying Super Guarantee (SG) super obligations for the March 2024 quarter.

But as super clearing houses may take up to 8 days to pass the money through to the super fund, it means that processing and payment to the clearing house should be made no later than Tuesday 16^th April.

Please note the ATO’s Small Business Clearing House has a much shorter clearance period – read more at https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-to-pay-super/small-business-superannuation-clearing-house/clearing-house-terms-and-conditions

And please make sure you have been calculating SG super at 11% since it increased on 1^st July 2023.

We take the opportunity to remind you that 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).
Individual contractor paid mainly for their labour.

But excluding the following forms of remuneration:-

Overtime.
Reimbursements.
Unused annual leave on termination.
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 $62,270.
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.

We welcome any question you might have.

SG deadline reminder for Dec 23 qtr

I trust you had an enjoyable festive season – but it is now time to focus on time critical obligations. So here is a quick SG deadline reminder.

With the 28^th falling on the weekend and the Australia Day public holiday on the 26^th, Thursday 27^th January is the end date for satisfying your Super Guarantee (SG) super obligations for the December 2023 quarter.

Please make sure you do not confuse this obligation with the December quarter BAS. The December quarter BAS automatically has a one month extension to 28^th February . There are no extensions for reporting and payment of SG super.

Please note that super clearing houses can take up to 8 days to pass the money through to the super fund. It therefore means that processing and payment to the clearing should be made as soon as possible.

And please make sure you have been calculating super at 11%% since it increased on 1^st July 2023.

Please refer to our previous quarterly reminder as to what forms of remuneration are subject to and not subject to Superannuation Guarantee.

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

We welcome any questions you might have.

Christmas & tax (& FBT & GST)

Entertaining and providing gifts at Christmas time to staff, customers and suppliers is a cost of doing business. However, there are some important FBT, GST and income tax considerations and outcomes to keep in mind.

As an employer, you need to be careful at what you provide at Christmas. The rules are complex and the costs of getting it wrong can prove very expensive.

We will outline some of the more common scenarios and what to be careful of.

Under-pinning the implications are the following key points:-

Christmas parties, entertainment and gifts are all treated under entertainment tax rules.
FBT applies to benefits given to employees.
There are no FBT implications on entertainment and gifts given to customers, clients and suppliers.
A business can adopt one of three methods to quantify the taxable components of any entertainment expenditure – in fact there are 38 permutations depending on who is entertained where, how and with whom. We will largely address the actual method which is the one used by most small businesses (as it usually results in the best outcome). It is beyond the scope of this briefing to address the 12 week log method and we will only touch upon the 50/50 method where relevant.
Christmas comes but once a year and to the best of my knowledge and experience does so on 25^th Nevertheless, the ATO treats Christmas parties and gifts as being what are called minor, infrequent and irregular benefits.
Such minor benefits are FBT exempt where they cost less than $300 (including GST) provided the actual method is used to quantify entertainment.

The Christmas party

Where entertainment is calculated under the actual expenditure method (which is the most common method for small businesses):-

A Christmas party is held on-site on a work day, the whole cost for each employee will be an exempt fringe benefit. So too will the spouse’s cost provided the cost per spouse is less than $300. No income tax deduction can be claimed for the cost of the party including that in respect of any family members that may attend. Taxi travel to or from the workplace (not both ways) will be exempt from FBT and not tax deductible.
When a Christmas party is held off the work premises, then the whole cost will be exempt from FBT provided the party costs less than $300 per person (employees and their spouses). No income tax deduction can be claimed for the cost of the party including that in respect of any family members that may attend.
If an external Christmas party costs more than $300 or more per person then the total cost is subject to FBT.
The cost of any entertainment provided during the party (whether that be at the work premises or outside) will be exempt if it costs less than $300 per head – for example a DJ, musician, clown and comedian.
The cost of entertaining clients, customers and suppliers is not subject to FBT and is not tax deductible.
Where any exemption is exceeded then FBT is payable. Consequently, an FBT Tax Return must be lodged and FBT paid (the FBT tax rate being the same as the top marginal tax rate). Please keep this in mind when completing the 2018/19 FBT Questionnaire in early April 2019.
All other entertainment during the year will be subject to FBT on a case by case basis.

Where entertainment is calculated under the 50/50 method:-

50% of the cost will be subject to FBT and this portion will be tax deductible. The other 50% will not be subject to FBT and will not be tax deductible. An FBT Tax Return must be lodged and FBT paid.
Only taxi travel from home to the venue will be FBT exempt and not deductible for tax.
50% of all other entertainment during the year will be subject to FBT.

Gifts

The following gifts are exempt from FBT and are tax deductible:-

Hampers, bottles of wine, gift vouchers, a pen set costing less than $300 (inclusive of GST).

The following gifts are subject to FBT and are not tax deductible:-

Tickets to a sporting event or theatre, holiday, accommodation, etc.

The GST treatment of gifts is:-

That the GST component of any tax deductible portion can be claimed back.
But the GST component that relates to the non tax deductible portion can’t be claimed.

Please do not hesitate to call us should you have any queries.

SG super payment reminder

Friday 27^th October is the end date for satisfying Super Guarantee (SG) super obligations for the September 2023 quarter.

But as super clearing houses may take up to 8 days to pass the money through to the super fund, it means that processing and payment to the clearing house should be made no later than this coming Wednesday.

And please make sure you have been calculating SG super at 11% since it increased on 1^st July 2023.

And being the start of a new financial year, we take the opportunity to remind you that 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).
Individual contractor paid mainly for their labour.

But excluding the following forms of remuneration:-

Overtime.
Reimbursements.
Unused annual leave on termination.
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 $62,270.
Non-residents performing work for an Australian business outside Australia.

We welcome any question you might have.

Two important WorkCover obligations

It’s a busy time of year and therefore timely to remind you of two important WorkCover obligations.

Injured at work posted

One of the fundamental WorkCover obligations is to display the If you are injured at work poster.

If a Victorian WorkCover official visits you then they ask to see it. And you will be fined if you don’t have it displayed.

Please note that this poster is to be displayed at each work location.

If you don’t have a copy you can download a copy at – click here

If you employ workers (and some types of contractors) interstate then you will also need to comply with that state or territory’s obligations.

WorkCover remuneration certification

It may be time to complete your 2023 WorkCover remuneration certification.

Large employers are required to submit early. Other employers have delayed lodgement dates. That said, it still may be in your interest to lodge soon. This is particularly the case if your remuneration will be significantly less in 2023/24 than for 2022/23.

You will get back what you over pay based off their estimate; but why over pay in the first place.

You will also ensure it is lodged. Many employers forget to lodge and suffer from WorkCover’s default 20% annual increase. So get it done now when you have finalised and issued the PAYG Payment Summaries.

Casual employee obligations

Casual employee – probably the most misunderstood employment term!

Whether your employee is causal or not is a question of fact. Yet stories abound about employers wrongly classifying employees as casual. As soon as there is regularity of days and/or hours then they are not casual. In particular, someone who works say Tuesdays, Thursdays and Fridays is not a casual employee; they are permanent part time.

So what is the risk of classifying someone incorrectly as a casual employee?

You might well have paid them a 25% loading – but if they go off to Fair Work Australia and win then you will have to pay leave entitlements on top of that 25%.

It may have been lost during covid, but employers are now required annually to offer casual employees full or part time work. You can read more at – https://www.mrsaccountants.com.au/important-action-if-you-employ-casual-employees/

Employees have the right to request full or part time work.

Employers with more than 15 employees are required to:-

Offer casual conversion at least annually.
Make a written offer within 21 days of anniversary.
If not offering conversion, notify the employee within 21 days (including reason).

These requirements provide a clear framework for employers to adhere to. Don’t expect to win any dispute if you have not followed these rules.

Please contact us if you would like a referral to an employment specialist.

How can I find lost super?

More people should ask that same question as ATO number reported as recently as the end of February that there is $16 billion of lost and unclaimed super.

So how can you find or check for lost super?

Log into your MyGov account and the click on the Manage My Super lik.
Call the ATO on 13 28 65
Complete a paper form – click here

You will need to have the following information ready to supply:-

Your Tax File Number
Your contact details
Details of any super fund you have been a member of – fund name, account number, beneficiaries and period of contributions

As this process requires the provision of personal information we are unable to attend to this on your behalf. But please don’t hesitate to ask us if you have any questions.

Important Single Touch Payroll 2 (STP) changes

Single Touch Payroll 2 (STP2) has finally kicked in.

Critically STP2 requires further disclosures. And it is critical to note that the expanded information will be shared with Fair Work Australia (FWA). FWA will jump on apparent offences – so one needs to be careful of making innocent mistakes.

STP2 will increase reporting in 2 ways:-

Greater disclosure of earnings.
Reporting extra information.

Greater earnings disclosure will comprise:-

Allowance types (within prescribed types).
Paid leave by types.
Overtime.
Bonuses.
Commissions.
Directors’ fees.
Salary sacrifice and deduction amounts.
Lumps sum payments and eligible termination payments.

Significantly, the following additional data are to be declared under STP2:-

Employment basis – full time, part-time and casual.
Tax treatments of employees (tax scale, Medicare Levy options and PAYG variations).
Termination reason.

What is particularly important is that if you weren’t STP2 compliant from the start of the year you may need to split and re-report data reported earlier in the year.

The ramifications of incorrect reporting may often by minor – but with Fair Work scanning reported pay information the ramifications could prove to be most unpleasant.

Please ask us if you like a referral to a payroll specialist.

Entertainment (meals and FBT)

Entertaining clients, customers, employees and suppliers is a cost of doing business.

But the total cost of entertainment varies wildly depending on who does what with whom where and why. According to the ATO there are 38 consequential outcomes.

The main determinant of the outcome is which of three FBT methods is used to determine any Fringe Benefits Tax – those being:-

Actual method (being the only method that provides an exemption for minor and infrequent expenditure).
50/50
12 week register.

Generally speaking, the smaller the business, the more attractive is the actual method (but again that depends on who is doing what with whom where and why).

The next consideration is what exemption can be used.

The actual method (which as stated above can only be used when the actual method has been chosen) exempts entertainment which is minor and infrequent and the cost per employee is less than per employee.

Also exempt is in house meals – being simple meals such as sandwiches.

You can read more here.

But the costs of getting it wrong is huge as the FBT tax rate is 47% (and that is without including fines and interest).

Please call us if you have any questions.

Is your ute or van subject to FBT?

Is your ute, van or workhorse vehicle subject to Fringe Benefits Tax (FBT)?

Workhorse vehicles have always been treated favourably.

However the ATO now has safe harbour provisions which you need to test against.

If those safe harbour provisions are satisfied for each vehicle, then no FBT is payable. This means that you have to have the necessary proof and declarations.

If those safe harbour provisions are not satisfied, then you will have a very hard time forming an opinion that FBT does not apply.

So that you can better understand your position, you can read more by clicking on the following link – click here.

This matter has become even more important pursuant to the ATO’s more aggressive approach in reviewing car claims and employer provided cars.

We welcome any question you may have.