Payroll – setup, fix-up, processing, IAS Reporting
Single Touch Payroll (STP) – Is the Government in Fantasy Land Taking This On?
I recently went to the annual Institute of Certified Book Keepers (ICB) Conference in Canberra of which I am a Public Practise Member. Single Touch Payroll was an area that was explored. What does this mean? It is the idea that the Government will simplify the reporting by employers of their PAYG and Superannuation obligations by reporting these via payroll systems directly to the Government during the course of processing payroll. It would include the option to pay PAYG at the same time as reporting. This raises many questions like; what when payroll needs to be amended, what if computerised systems are not used and the many other aspects of the detail are yet to be developed. The voluntary pilot program targeted at small to medium enterprises may commence from January 2017. Most of the benefits of STP are centred around the government gaining additional revenue (of course) along with simplifying SuperChoice, TFN Declarations, end of year payment summary process.
Superannuation Guarantee – Get Superstream Ready?
I recently attended an Association of Australian Accounting Technicians (AAT) workshop in Sydney of which I am an Affiliate Member.
Many area’s were covered mostly around compliance – but one that I found particularly interested was around superannuation guarantee (SGC) and superstream.
Many businesses would potentially be in the category of – leaving their own superannuation monies until cash-flow permits! If you are a Director of a Company and are drawing wages via the normal payroll processes – in the event of an Audit by the ATO, if your own superannuation monies has not been paid up to date – you are not beyond the normal courses of action. Interestingly, in the event of an audit any superannuation guarantee monies that has not been paid on time – regardless of how late it is, the ATO can lodge a late payment advise and charge interest on the late payment from the date of the form being lodged – NOT the number of days it was actually paid late. It is the responsibility of the Directors of the company/owners of the business, to submit this paperwork and comply to the SGC statutory requirements. This leads us to Superstream. In my opinion, superstream is all about getting more business to pay their SCG correctly, on time and in full. Both MYOB and Xero accounting software packages have inbuilt superstream functionality – which we are very excited about. But for business who are not using software packages, or don’t want to enable this functionality – there are many clearing houses that can facilitate the same. It is by no means as easy or quick or accurate, but available. I recommend being superstream compliant via the accounting software packages because it really does take away the pressure of lodging correct amounts and paying the correct amount from your bank account. Most people know it is not easy to get superannuation monies paid back from funds once they have been submitted so it is much better to get it right first time!
Department of Fair Work – What Can They Help With?
We recently attended a Fair Work Seminar that was held at Links House locally in Bowral. Which was really nice not to have to travel, so we thank Industrial Relations for that. The gentlemen presenter was very good. Some of the interesting points that were covered included for example, that there is a difference, between travel/vehicle allowances provided for work related travel from an Industrial Relations/Award perspective compared to Taxation Lawiethe cents per km allowance. If in doubt – the advice given was to pay the higher option. After all, complaints to the Fair Work Ombudsman are ones of underpayment rather than over! Fair Work Ombudsman Department was also a hot topic – as was presented at the AAT Workshop back in March. I am in love with the PACT Calculator – a great tool that the FWO had internally to assist with selecting awards and pay rates if you called the hotline. FWO have made this available now via their website at https://calculate.fairwork.gov.au. It really takes the pain away from setting up payroll and new pay rates. The resounding message from the presentation was that they really are there to help and as long as the Employer can show that they have taken due care and consideration in relation to the awards, pay rates and conditions of their employees – there will always be support in times of Employee Complaints. Their focus is on protecting those employees’ where they being underpaid, overworked and Awards are being completely disregarded. The area of Awards is a complex one when looking at closely – Modern, National……..and the fact that Awards are amended and unless you keep looking your business may miss the changes. Another great feature of PACT – register for Award updates so that you are kept in the loop!
Superannuation Guarantee Contributions – What are Considered Ordinary Time Earnings (OTE)?
SGC has been calculated on OTE since 1st July 2008 – but what are OTE and what are not?The minimum amount that SG contributions are calculated on for employees includes the following types ofpayments:
- Salary or wages not including overtime (however if an employee has agreed to work a certain number of hours, those hours are the employee’s ordinary hours of work)
- Allowances (other than a reimbursement of expenses)
- Christmas bonuses (From 1 July 2009 only)
- Payments in lieu of notice (From 1 July 2009 only)
- Shift loading
- Casual loading
- Workers compensation payments, including topup
- payments, paid by the employer, where work is performed
- Pay for annual holiday leave taken
- Government (wage) subsidies (eg Wage Subsidy Scheme Allowance)
- Pay for sick leave taken
- Pay for long service leave taken
- Director’s fees
- Payments for performance in, or provision of services relating to entertainment, sport promotions, films, discs, tapes, TV or radio.
- Payments to a contractor who is taken to be an employee under the Superannuation Guarantee (Administration) Act 1992
- Salary or wages paid to former employees
The following types of payments are not included in the minimum amount that SG contributions are calculated on:
- Reimbursement of expenses (eg travel costs)
- Benefits subject to fringe benefits tax
- Workers compensation payments (including topup
- payments) where no work is performed
- Payments when on jury duty, defence forces reserves leave or emergency services leave
- Parental leave payments (includes maternity, paternity and adoption leave)
- Annual leave loading
- Accrued annual leave, long service leave and sick leave paid as a lump sum on termination
- Redundancy payments
- Other payments paid by an employer on termination of employment
- Partnership and trust distributions
- Payments for entering into a restraint of trade agreement
- Payments for domestic or private work (not as part of a business) 30 hours or less per week
These should always be checked against the particular awards to ensure that there are not exceptions to these rules.
Lead Up To Christmas – Payroll
The lead up to Christmas is always a busy time for book keepers. Trying to finalise all our clients books as current as possible as soon after the new year it will be time to prepare Quarter 2 BAS for 10/11 and lodge with the ATO.
It is also a busy time as many of our clients with Payroll who will need holiday leave and loading worked out for their staff and will want to know budgeting wise how much they need to put aside from the company’srevenue to cover these additional costs.
Remember to make sure that someone within the organisation prepares leave records for each individual staff member so that entitlements can be worked out. These must be signed off by the owner or manager of the business prior to payment and of course confirmed with the employee involved.