Single Touch Payroll
As we head into the new financial year, employers need to be preparing for the new Single Touch Payroll (STP) reporting requirement that will become mandatory on 1st July 2019. To be STP compliant, employers will need to report wages, withholding tax and super to the ATO after each payrun. Exemptions are in place for closely held entities (i.e. family businesses or employees made up of only directors and shareholders) who have until next year to start reporting, and micro-businesses (less than 5 employees) who only need to report quarterly.
If you use an accounting package with integrated payroll then it is most likely that your software system is STP-ready so just switch on the reporting functionality from 1st July 2019. If however, your system isn’t supported then there are a number of stand-alone STP solutions also available.
Comprehensive information regarding STP can be found on the ATO website however you will be hearing from us over the coming weeks to help you become STP ready.
PAYG Withholding Deductibility
From 1st July 2019, if you fail to withhold PAYG tax from a payment then you cannot claim a tax deduction for that payment. Further, if you withheld PAYG tax from a payment but didn’t report it to the ATO then you also lose your deduction for the payment. The exceptions to both circumstances is to notify the ATO of the errors and correct your mistakes before the ATO commences an audit or other compliance activity.
Working Holiday Makers
Do you employ temporary residents? If they are on a working holiday visa (subclass 417 or 462) then you need to register as an employer of working holiday makers. Registrations can be done online or by phone and need to be complete before the first payment is made otherwise penalties may apply. Further information, including withholding tax rates can be found on the ATO website.
Payroll Tax Thresholds
The payroll tax threshold rates are increasing. If you are an employer who pays wages of more than $65,205 per month, then you may need to review your payroll tax obligations.
Small Business Employee Grant Ending
There is less than three weeks left until the NSW Small Business Employee Grant registration ends on 1st July 2019. This grant is available for businesses who increase the number of full-time or full-time equivalent employees in their business. The grant is up to $2,000 per employee and is paid on the anniversary of the employee’s start date given they maintain employment for 12 months. To check your eligibility and to apply go to https://www.revenue.nsw.gov.au/grants-schemes/small-business-grant.
End of Financial Year Payroll Processing
As the end of the financial year rolls around, all employers should be preparing to close off the 2019 payroll commitments. Before generating payment summaries for their employees, various checks should be performed on the accounts to ensure the data you are reporting is correct. Xero provide a comprehensive step-by-step guide to processing the end-of-financial-year payroll for users to work through including checking payroll activity and lodging the payment summary annual report with the ATO which is due 14th August 2019.
We all know that 9.5% superannuation should be paid on employees earning over $450/month, but what about employees who are under 18? If they are working more than 30 hours per week then they too need to be paid superannuation. And how about contractors? The ATO provides an online tool to help you decide if you need to pay super for your contractors but if you’re paying them regularly for the work that they perform then they may be entitle to superannuation on top of their usual pay.
As always, the team at Care Accounting are here to help if you have any questions.