Posts Categorized: Employment matters

Super Stream tips

Some employers may think it is another compliance burden. What it is though is a streamlined system – and many experienced book-keepers that I have spoken to have been glowing in their stories about the great time savings even in these early stages.  Thankfully, gone are the days where an employer with 18 employees can be paying separately into 8, 10 or even 18 different funds – now they have just one reporting and payment process.  As some are still to register, here are some Super Stream tips.

  1. You can use either your payroll software, a clearing house or one of the large super funds.
  2. I would avoid using the large super funds and anything but the ATO’s clearing house as their processing times can be as long as 10 business days – which means to meet the deadline of the 28th day after quarter end, some will have to report and contribute two weeks beforehand.
  3. The ATO provides a free clearing house for those employers with less than 20 employees. Not only is it a free service but contributions made to this clearing house are treated as being made on the day they are made to the clearing house (as it is an approved clearing house).
  4. It is called the Small Business Super Clearing House (SBSCH). You can register for it at – https://www.ato.gov.au/business/super-for-employers/paying-super-contributions/small-business-superannuation-clearing-house/#
  5. To register, you will a number of items at your fingertips.
  6. Apparently the registration works best when done in Chrome.
  7. Employers have since 2005 been required to provide their employees with choice of super fund (and which nominates a default super fund if the employee does not exercise their choice). An old form though will not have some information that you will need to complete the registration and make payment.
  8. You will need the USI (Unique Superannuation Identifier) and ABN of each super fund.
  9. You need every employee’s TFN and their super fund member number.
  10. You can get the USI from your employee’s last member’s statement, by ringing the fund or checking a USI register which you can find at http://superfundlookup.gov.au/DownloadUsiList.aspx
  11. If an employee nominates their complying self managed super fund, then they will need to provide you with its electronic service address.
  12. Please be very careful when selecting the fund when setting up your clearing account as payment to the wrong fund will mean you still have to pay the correct fund. The registration will bring up the name of the selected fund but as many names are very similar, please ensure you select the right one.
  13. You will be asked for your banking account details in case there is a refund to be paid back.
  14. You will still need to make payment by EFT or BPay; payment will not be automatically deducted from your nominated bank account.
  15. Please note that you will be issued with a different account number to pay into for each entity.  To avoid paying into the wrong account and having the payment returned, you will need to give each SBCH bank account a different name within internet banking.
  16. It is a legal requirement that you send the payment and message on the same day – so don’t do it at 5 minutes to 6pm and then miss the banking cut-off.

Please don’t hesitate to ask us any questions you may have.

You may also like to watch the ATO’s video (but don’t panic s it was published before the October extension was announced).

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

 

A guide to avoiding employment disasters

There are many things to get right when employing someone.  And whilst employees are protected by Fair Work Australia, there is no such protection offered to employers.  As an employer, you must get everything 100% right.  Thankfully, a federal government has finally produced a guide to avoiding employment disasters.

The minister for small business Kelly O’Dwyer recently released a checklist by which small business owners can find all of the things they need to address and do and do so by going to just the one source.

The checklist also provides information on:-

  • The various types of employment
  • Awards
  • WorkCover
  • Employing foreigners
  • Anti-discrimination
  • Record keeping requirements
  • PAYG WH and SG super obligations
  • Health & safety

It also has a employee v contractor decision tool.

You can access the checklist at:-

https://www.business.gov.au/info/run/employ-people/recruitment-hiring-employees/taking-on-an-employee-checklist

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

Are you Super Stream ready?

Are you Super Stream ready?  You need to be as it is the only way that employers can both report and pay employer super contributions after 30th June 2016.

It won’t apply to personal contributions nor to employer contributions to a related party’s self managed super fund.  Every other employer contribution by every employer in the country must be made through Super Stream.

You can learn more by watching the following video from the Australian Taxation Office.

Or better yet ask us to help you personally.

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

WorkCover injury poster

There are a number of obligations under WorkCover.

One of the fundamental ones is to display the If you are injured at work poster which you can access at http://www.rrp.com.au/safety-blog/workplace-noticeboard-requirements

If you are visited by a Victorian WorkCover official then they will most likely ask to see it – and you will be fined if you don’t have it displayed.

If you employ workers (and some types of contractors) interstate then you will also need to comply with that state or territory’s obligations (which can also be checked at the above web page link.

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

Deadlines for Sep 15 quarter

For those of you who are employers, Wednesday 28th October is the end date for satisfying your SGC super obligation for the September quarter.  Late payments will attract substantial interest and penalties.  Consequently, SGC super should never be paid late.  In the past, payments made even a day late had to be paid directly to the ATO.  Now payments up to a month late can still be made to employees’ super funds.  Payments made more than one month in arrears must be paid to the ATO.  BAS’s and SGC liabilities that remain unreported and unpaid after 3 months automatically become personal debts of directors.

As per earlier reminders, the SGC rate increased from 9.25% to 9.50% as from 1st July 2014.  Please ensure that your system is calculating the SGC at this slightly higher new rate as we have found some clients have still been using the previous rate.

For those who lodge a quarterly BAS, your September quarter BAS is due for lodgement by Wednesday 28th October.  However, you will have to Wednesday 11th November if you are a registered user of the Tax Office’s Taxpayer Portal.  As per our June 2014 edition of Tips & Traps, we encourage you to register for the ATO Taxpayer Portal if you have not done so already; particularly as no further paper activity statements will be issued when an activity statement has been lodged electronically after 30th June 2014.

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

So what did Friday’s public holiday cost your business?

We have long had a public holiday for a horse race; we now have one for the AFL Grand Final.

I have been asked many times over the last week about what Friday’s holiday cost the typical small businesses. The answer depends on the nature of your costs.

If your costs are largely fixed (like mine), the loss is basically the loss of time and subsequent billings. Or costs basically don’t change – maybe we saved $10 of electricity.

Other business will have more variable costs than fixed. Most of these businesses losses won’t be as great as they avoided the variable costs that otherwise would have been incurred on Friday.

Some businesses may have gained, but I suspect that they are few and far between. I understand a lot of shops were closed but some cafes may have a booming day even after allowing for penalty rates and other labour costs.

All this leads to an interesting point.

So few business understand what costs are direct and which aren’t and which ones are fixed and which are variable.  They don’t know their gross margins and they don’t know their break-even point (which may be rising in steps as they grow).

With this information to hand, you can confidentially make decisions about your business and know what the outcome will look like. Our business clients know these things. Do you? If not, why not have a free meeting with us to see how we can help you.

In the meantime, read the following posts from our archive:-

  • 1st post from Feb 2015 – Greater profitability is closer than you may realise
  • Last post from Feb 2015 – When growth is bad (and running out of cash)
  • Last post from March 2015 – What your accounting system should do for you.

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

Keeping pay records

Well last week’s blog on pay slip requirements created some traffic.

In light of that, this week it is opportune to remind employers that an employer is required to keep their time and wage records for 7 years.

They can be in electronic form or paper based. They must also be legible, in English and accessible to a Fair Work Inspector if they come knocking.

One common oversight is that when a business is sold, the new employer has three months to request the employment records form the former employer – you would be surprised how many times that a sale of business contract fail to address this handover.

For details on what you are required to keep (including leave records), go to:-

http://www.fairwork.gov.au/pay/pay-slips-and-record-keeping/record-keeping

 

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

Pay slips – what you must do

It always alarms me in discussions with new clients just how many of them don’t satisfy employment laws and obligations.

In particular, it amazes how many don’t provide complying pay slips to their employees. Many employers don’t even realise it is mandatory to issue all employees within 1 day of their payment.

Fair Work Australia provides all the information you need in respect of what employers are required to do in respect of pay slips (and related matters). They even provide a template for those who do not have a computerised payroll system.

Click on the following link to make sure that you are complying with your obligations.

http://www.fairwork.gov.au/pay/pay-slips-and-record-keeping/pay-slips

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

Employer reporting obligations for June 2015

For those of you who are employers, Tuesday 28th July is the end date for satisfying your SGC super obligation for the June 2015 quarter.  Late payments will attract substantial interest and penalties which effectively doubles or triples the cost.  Even if your cash flow is tight, this commitment should be paid before anything else.

The final day for payments and reporting of Victorian Pay-roll Tax is Tuesday 21st July.

For those who lodge a quarterly BAS or IAS, your June quarter activity statement is due to be lodged by Tuesday 28th July (but 25th August for activity statements if you have registered your business as a user of the Taxpayer Portal and are not paying only fixed $ instalments).

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 $170 for every 28 days that a form is lodged late whereas as late payment results in an interest levy (which is often remitted).  A fine is not tax deductible, interest is.  Not that we encourage it, but should you not be able to pay an activity statement in full, do not defer lodgement as the possible fines are significant.  The ATO will of course in time identify that an activity statement liability has not been paid and follow it up; but by this time though the liability should be paid in full anyway and at worst, incur a deductible interest charge far less than any non-lodgement penalty.

I remind you that under the Director Penalty Regime which came into effect in July 2012, PAYG Withholding (WH) and SGC super which remains unreported and unpaid after 3 months now results in the unpaid amounts becoming a personal liability of any directors.  Placing a company into liquidation doesn’t avoid or extinguish this liability.  For further information, please refer to our September 2012 Tips and Traps newsletter.

WorkCover finally saw sense a few years ago and now issue staggered lodgement dates for the annual Certificate of Rateable Remuneration.  This Certificate advises WorkCover of the exact remuneration for the prior year which triggers a reconciliation process against premiums paid during the 2014/15 year.  The Certificate also serves to advise the expected remuneration for the forthcoming 2015/16 year.  Non-lodgement may result in an excess assessment as their default assessment may increase remuneration by some 20%.  Employers with a March 2016 lodgement date who expect to have lower remuneration in 2015/16 will need to lodge their 2015 Certificate before the end of August to ensure that are not levied an excessive premium in 2015/16.  Please contact us should you have any queries or require assistance.

The government had previously scheduled the introduction of the Single Touch Payroll (STP) reporting for all employers on an progressive basis from July 2016 (with all employers required to adhere to electronic notification by July 2018).  They have deferred the first introduction date of July 2016 as they now (finally) understand that businesses are largely unprepared for such a system and the associated costs.  Under this system, each payment to each employee will be reported to the ATO at the time of payment (including super thereon).  We had been developing  package to our clients who would have been unable or not willing to attend to this real time reporting but will now defer any further action until we have a concrete start date.

Choice of super fund

Offering employees choice of super fund has been compulsory for most employers since July 2005.  It was introduced for two major reasons:-

  • To enable employees to dictate where their super savings where invested, and
  • Overcome the problem of departing employees not being able to continue their existing life insurance – not ideal for one over 45 years of age.

An employer not excluded from the choice system must provide an employee with a Standard Choice Form within 28 days:-

  • To a new employee.
  • To an existing employee who requests to make another nomination.
  • Where you change the default fund.
  • You are unable to contribute to the nominated employee’s fund.
  • The employee’s fund becomes a non-complying fund.

The form must offer a default fund into which contributions will be made if the employee doesn’t nominate a different complying super fund (which can be the employee’s own self managed super fund).  If the employee exercises choice, they must complete the form and return it with certain information as set out on the form.  You can obtain a copy of the form by clicking on the following link:-

http://tinyurl.com/pcnj3oc

Once an employee exercises choice by nominating a fund, an employer has 2 months to arrange for contributions to be made into the nominated fund.

Which funds can an employer use a default fund?  It must:-

  • Be a complying fund,
  • Be registered by APRA to offer a MySuper product,
  • Provide a minimum level of life insurance as set out in the regulations.

If you would like to know more, please call us or ask for a copy of the last edition of our Tips and Traps newsletter which explored this area in more detail.