Employers and employees have certain obligations to each other under common law. Employers have obligations under federal and state and territory laws, industrial awards and agreements, tribunal decisions and contracts of employment.
We can facilitate your payroll function with specialist services of a Chartered Accountant, by:
- Ensuring you meet all your employer obligations in relation to payroll tax, superannuation and PAYG
- Providing electronic payslips to staff each pay period
- Facilitating the payment of wages, PAYG, Superannuation and payroll tax either via a trust account or via authorised bank account (which is controlled by you)
As an employer, there are certain obligations you must comply with, these include:
- Fringe benefits tax
- Pay as You Go Withholding
- Payroll Tax
- Superannuation
- Workers Compensation Insurance
The first step in working out your obligations as an employer is to determine the status of the worker.
Are your workers employees or contractor?
An employee is a worker you employ in your business - you generally have to withhold tax from payments you make to them. A contract worker is a worker who is self-employed and has a contract with you to provide services. You don’t have to withhold tax from payments to them, unless you enter into a voluntary agreement with them.
Fringe Benefits Tax
FBT is a tax payable by employers for benefits paid to an employee or the employee’s associate in place of salary or wages. Examples of benefits include a car, car parking, low interest loan and payments of private expenses.
If you are an employer and provide fringe benefits to your employees, the Tax Office recommends that you register for FBT.
Pay as You Go Withholding (PAYG)
Pay As You Go (PAYG) withholding is a legal requirement to withhold amounts for income tax purposes.
If you have employees, you're required to withhold tax from payments you make to them. You may have to withhold tax from payments to other workers, such as contract workers. As a new employer, you must register with the Tax Office before you withhold from payments to your employees.
You may also need to withhold an amount from payments to other businesses if they don't quote their ABN to you on an invoice or other document if required.
You must send all withheld amounts to the Tax Office.
Payroll Tax
Pay-roll tax is a state tax on the wages paid by employers. It is calculated on the amount of wages you pay per month. You must pay pay-roll tax if your total Australian wages exceed the exemption threshold that applies in your state or territory - exemption thresholds vary between states.
Superannuation
Running a business or employing people is likely to involve superannuation obligations. Most of your employees, whether full-time, part-time or casual, will be covered by the superannuation guarantee legislation.
As an employer you are required to make superannuation guarantee contributions on behalf of your eligible employees at least once each quarter. You need to pay super contributions at least four times a year, by the cut off dates each quarter: 28 October, 28 January, 28 April and 28 July.
You now need to:
- pay super contributions for your eligible employees by the cut off dates each quarter.
- pay at least the minimum 9% contribution amount of the earnings base (generally ordinary time earnings ). From 1 July 2008 ordinary time earnings should always be used for each eligible employee.
- check if any of your employees are eligible for a choice of super fund.
- provide your eligible employees with a Standard choice form.
- pass on your employees' tax file numbers to their super fund within 14 days of receiving it (if you don't make contributions during that period, you can provide the tax file numbers when you make the contributions).
- pay super contributions for any eligible contractors.
- keep records of your super contribution payments and that you have offered your eligible employers choice of super fund.
If you don't make your superannuation contributions by the cut off dates you will face penalties.
If you require assistance, please contact us on (02) 8264-0755
All representations and information on this site is general in nature and should not be relied upon as advice. If you require specific advice please contact us.