Are you an employer? Make sure you’re getting it right this tax time!
The ATO has created a list of key tips to help employers stay on top of their obligations.
If you’re an employer, these are the areas you should keep an eye on this tax season:
Single Touch Payroll
Single Touch Payroll (STP) data for your employees must be finalised by 14 July, as this information is required for them to complete their tax return.
It is essential that you are accurately reporting, as this information is used to prefill tax returns. Government agencies will also use this information when interacting with you or your employees.
If you have closely held payees (e.g. family members of a family business. directors or shareholders of a company, beneficiaries of a trust), you may be able to finalise STP for these payees at a later date. It is important that you ensure you are finalising the STP data for the 2022–23 financial year – especially if doing so early in July.
If you need to update or amend data you’ve already finalised, you must ensure you make the finalisation declaration again.
When you pay your employees, you must withhold a portion of their pay for tax. You then report this through STP and your business activity statements. It is important to ensure that you use the same ABN and branch number for both STP and BAS.
For any payments not reported and finalised through STP, you will need to lodge a PAYG withholding annual report with the ATO. All information regarding the annual report can be found here: PAYG Withholding Annual Reports
Remember: Not all employees will have the same PAYG withholding rates. You must be checking the ATO Tax Tables to ensure you are withholding the correct amount of tax for each employee or other payees. Tax table information can be found here.
Super Guarantee Rate
As at 1 July 2023, the SG rate is 11% (recently increased from 10.5%) on any amount earned (for employees over 18 [under 18s earn super when working over 30 hours a week]). The SG rate is increasing progressively by 0.5% each year until 1 July 2025, where it will reach 12%.
It is important that your payroll and accounting systems have been updated to reflect the SG rate increase.
If you do not pay your employees SG within the allocated timeline, you will be penalised with a Super Guarantee Charge (SGC).
If you have a new employee that has not chosen a fund, you can request their stapled super fund details from the ATO.
If you use a clearing house to make super payments, you must allow extra processing time to avoid late payments. This ensures that payments are received in your employee’s fund on or before quarterly due dates.
Quarterly due dates are as follows:
- 28 October
- 28 January
- 28 April
- 28 July
If you miss a payment date, even by only one day, you will be required to lodge an SG charge (SGC) statement and pay the SGC to the ATO.
If your SG payment is late by more than one calendar month, you could be looking at potential penalties of up to 200% of the SGC. Additional penalties could also apply.
Fringe Benefits Tax
Fringe Benefits Tax (FBT) is paid by employers on certain benefits provided to their employees, or to their employees’ family or other associates. It’s separate to income tax and is calculated on the taxable value of the fringe benefit.
The 2023 FBT year ended on 31 March. If you are lodging your own return, your return is due to be lodged on May 21. If you are using a registered tax agent (BIS Cosgrove) to lodge on your behalf, your due date is June 25. If you have missed these dates, ensure you lodge your return and pay the FBT owing as soon as possible.
Six tips for getting FBT right
- Identify what kind of fringe benefits have been provided to employees: If benefits are non-cash, consider whether FBT will apply.
- Calculate the taxable value of the benefits: Make sure you are using approved valuation methods when you are calculating the taxable value of the fringe benefits that have been provided.
- Lodge an FBT return: If lodging yourself, you will be required to lodge your FBT return and pay any FBT amounts owing before or on 21 May 2023. If you are lodging via a tax agent, you have until June 25.
- If the reportable fringe benefits provided to an employee during the FBT year exceeds $2,000 in value, you will be required to include the grossed-up value through STP or on the employee’s payment summary.
- Remember, contributions that your employees have made towards the cost of a benefit are assessable income. Be sure to include any employee contribution amounts in your income tax return.
- Keep a record to prove your calculations: Ensure that you are keeping relevant records for the required timeframe to demonstrate your FBT calculations.
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The material and contents provided in this publication are general and informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.