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Payroll & Superannuation changes

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 Payroll & Reporting to ATO 

Do you pay wages to employees ?

Do you pay wages to yourself ?

If you answered yes to either question, essential information follows

 

Single Touch Reporting

If you employ staff in your business you will already be familiar with Single Touch Reporting. The ATO introduced compulsory reporting of payroll information back in July 2019. All payroll software providers have STP enabled software that sends information to the ATO after each payrun. Information sent to the ATO includes -

  • Employees name
  • Gross wages
  • Pay as you go (PAYG) withholding
  • Super liability information
  • EOFY finalisation (replaced PAYG summary or Group Certificate)

 Closely held payees

Closely held employees is a term used to describe an individual that is directly related to the entity from which they receive payments. For example, family members of a family business, directors or shareholders of a company or beneficiaries of a trust

From 01 July 2021 Single Touch Payroll reporting will be compulsory for all Closely Held Payees.

What does this mean for you ?

  1. If you already have a payroll solution, you will need to add all closely held employees to that payroll
  2. If you don't have a payroll solution, you will need to subscribe to one that will enable you to report to the ATO

Contact us to discuss payroll solutions 1300 55 22 30 - we only recommend Xero Software and in some instances we can offer a payroll only version from only $10 per month (depending on your needs).

Ways to report amounts paid to closely held payees

As a self-employed business person the ATO realises that your payments aren't always as straight forward as an hourly rate or regular salary for the work you do. They offer 3 ways to report the information -

Report actual payments on or before the date of payment – whenever you make a payment to a closely held payee, report the information on or before each pay event.

Report actual payments quarterly  – report your actual payments to closely held payees quarterly. Each quarter, when your activity statement is due, report all payments made in that quarter.

Report a reasonable estimate quarterly  – report amounts equal to or greater than a percentage of gross payments and tax withheld from the latest year, across each quarter.

 

Expanding Single Touch Payroll - (Phase 2)

STP - Phase 2

In the 2019–20 Budget, the Government announced that Single Touch Payroll (STP) would be expanded to include additional information.

This expansion of STP (also known as STP Phase 2) will reduce the reporting burden for employers who need to report information about their employees to multiple government agencies. It also supports the administration of the social security system.

The mandatory start date for STP Phase 2 reporting will be 1 January 2022.

Your payroll software provided will make changes to enable this reporting. Follow their updates/blogs for information.

The key details that will be additionally reported are -

  • Employment basis of employees
  • Tax treatment of employees wages
  • Cessation reasons for employees leaving
  • Child support reporting
  • Itemised reporting of gross payments For more information check out the link below

Expanding Single Touch Payroll factsheet 

 

Superannuation Contributions

Pay SGC for employees

Superannuation Guarantee (9.5%) obligations are deductible in the year in which they are paid. SGC for the June quarter is due for payment by 28 July 2021. However, to be deductible in the 2021 financial year, you should make this payment by 22 June 2021 to ensure funds are cleared through to the employees superannuation account.

Additional Super for yourselves

The maximum amount of deductible superannuation contributions for all tax payers is $25,000. Super contributions are taxed at 15% in your super fund (subject to high income surcharges), whilst providing a deduction at your marginal tax rate or the company rate.

Additional Super for yourselves - catch-up

If your concessional contributions for 2019 and 2020 were less than the allowed $25,000, then you are able to contribute extra as a catch in the current year, or any of the next 4 years (5 year limit before shortfall expires)

Super obligations for employers

Part of your obligations as an employer is to pay superannuation guarantee. Super provides income for your employees in their retirement. You should consider the following to ensure you're meeting your super obligations.

 

Important Changes to Super

Superannuation Guarantee percentage is changing !!

From 01 July 2021 the amount of super you pay to your employees will increase from the current 9.5% to 10%.

Payroll software will need to be updated for this to take affect. Most software providers will make sure this happens, but you should do a spot check on super amounts paid in the first payrun after 01 July 2021 to ensure you are complying.

If you are paying your staff more than 9.5% SGC at the moment additional checks may be required after 01 July 2021. Contact us for help.

The governments intention is to increase this amount by 0.5% each year until SGC reaches 12% on 01 July 2025.



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