Posts Categorized: BAS and super obligations

SG super reminder

Friday 28th January is the end date for satisfying your Super Guarantee (SG) super obligations for the December 2021 quarter.

Please note that super clearing houses take up to 10 days to pass the money through to the super fund.  It therefore means that processing and payment to the clearing should be made no later than this Friday.

And please make sure you have been calculating super at 10% since it increased on 1st July 2021.

SG super should never be paid late as late payments attract substantial interest and penalties.  Furthermore, SG (and BAS) liabilities that remain unreported and unpaid after 3 months automatically become personal debts of directors.

We welcome any question you might have.

The 5 key things to implement in 2022

Hard to be believe this year is almost over!  It has been a tough year for many.  But that said, the economy has performed surprisingly well, we have high vaccination rates and statements from our leaders that we are not going back into lockdown.

It seems as though we can relax over the Christmas break with a degree of calm.

The Christmas break is a great time to take a breath and re-asses your work and personal life.

But having started work on the back of the 1983 recession and worked through the ealry’90’s recession, not to mention the GFC, the 1997 Asian crisis and other such events, the effects of covid will play out for a couple of years yet.  We are not out of the woods yet.

In light of the uncertain times that lie ahead, on Wednesday 12th January we will explore 5 key things to address and implement in 2022

  1. Re-evaluate how covid has changed your business and moreover how your business needs to adapt. In particular we will explore who is now your customer target base and how to find them.
  2. Amend your STP payroll reporting to not fall foul of Fair Work Australia obligations.
  3. Making a profit is the goal but the oxygen to a business is its cash flow. We will explore how to better manage and improve your cash flow.
  4. With a federal election looming, take up any advantage under existing tax laws.
  5. Being in business carries the risk of getting sued. We will examine key asset protection strategies to protect the wealth you have worked hard to generate and/or inherited.

You can reserve your place at this 45 minute webinar by clicking here

And as we are passionate about helping small business owners through these difficult times, we welcome your passing on this invitation to family, friend and business associates.

Important change to employer super obligations

An important new requirement took effect from 1st November 2021.  Employers now need to complete an extra step in respect of super when taking on a new employee.

Back in 2005, the ATO introduced Choice of Super Fund rules.  This was a positive change as it ensured employees had a choice as to where their super would be contributed to.  This initiative limited employees having multiple accounts and therefore reduced extra costs and the opportunity for super to be lost.  And arguably more importantly, it also ensured employees did not lose life insurance under super when changing jobs.

Where an employee did not exercise their choice then the super had to be made to a default fund.  A default fund had to offer a minimum $50,000 in life insurance (hardly enough but better than nothing).  The default fund was also specified in an award (hence the rise of the industry funds).

An improvement has been made to the choice system in light of technological advancements and the number of employees with multiple super accounts as a result of their not exercising choice.

So from 1st November, a system has been put in place to staple a super account to an employee.  This means that the default fund choice will be replaced by employers having to contribute to a stapled super fund where no choice is exercised.  It only applies to employees employed on or after 1st November 2021 (with one exception below).

How do you find an employees’ stapled super fund?

If a new employee has not exercised choice within 28 days of starting employment, then the employer must log on ATO online services and access the stapled super fund service.  Apparently the stapled fund(s) will be listed on screen within minutes of completing a request.

We are not yet clear as to what employers without access to a computer or ATO online services are supposed to do (other than ask employees to complete and return the choice form within 28 days).

What if you contribute to a non-stapled super fund?

If an employer contributes into the default fund without checking for a stapled super fund, then that contribution will be subject to super guarantee charge.  In other words, the contribution is disregarded AND another contribution has to be made (which is non-deductible and can easily be two to three times more costly).

Other words of warning

  • Employers only have two months to contribute into a super fund after an employee has exercised their choice.
  • If you received an employees choice before 1st November where they nominated the default fund but no contributions were made before 1st November, contributions must be made under the new stapled super fund requirements.

Want to know more?

Call us

SG super reminder

Thursday 28th October is the end date for satisfying Super Guarantee (SG) super obligations for the September 2021 quarter.

But as super clearing houses take up to 10 days to pass the money through to the super fund, it means that processing and payment to the clearing should be made no later than this Friday.

And please make sure you have been calculating super at 10% since it increased on 1st July 2021.

And being the start of a new financial year, we take the opportunity t remind you that SG super is payable on all forms of remuneration including:-

  • Commissions.
  • Bonuses (but see below).
  • Directors’ fees and all other forms of remuneration to directors.
  • Allowances (except where fully expended).
  • Individual contractor paid mainly for their labour.

But excluding the following forms of remuneration:-

  • Overtime.
  • Reimbursements.
  • Unused annual leave on termination.
  • Remuneration of less than $450 in a month.
  • Bonuses that are only in respect of overtime.
  • Bonuses that are ex-gratia but have nothing to do with hours worked (harder to satisfy than what you might think).
  • In respect of employees younger than 18.
  • Employees carrying our duties of a private or domestic nature for less than 30 hours in a week (such as nannies).
  • On quarterly remuneration greater than $58,920.
  • Non-residents performing work for an Australian business outside Australia.

SGC super should never be paid late as late payments attract substantial interest and penalties.  Furthermore, and SG (and BAS) liabilities that remain unreported and unpaid after 3 months automatically become personal debts of directors.

We welcome any question you might have.

 

Update on extended Victorian Gov covid support

Further details have come to hand about the Victorian government’s extended covid lockdown support.  There are however a number of initiative extensions await clarification and/or legislation.

Commercial Tenancy Relief

  • We can now clarify that the extended system that will run to January 2022:-

  • At least half of any further rent reduction must be waived; no more than half of the rent reduction can be deferred.

  • From 28th July, landlords can only lock out tenants after receiving Victorian Small Business Council permission.

Licenced Hospitality Venue Fund

  • In order to qualify a business must have both a liquor licence and a food certificate.

We will post further details when they come to hand.

Payroll reporting deadlines

With the progressive roll-out of Single Touch Payroll, year end finalisation deadlines are tightening.  It’s not like the “good old” Payment Summary days were one had to the 14th August to return the stationery.  Employers are now required to complete the Single Touch Payroll finalisation step by 14th July.

Thankfully though two extensions are available this year:-

  • In response to demands caused to business owners, 31st July

  • For closely held employees (family members) 30th September

Those larger employers that are subject to Pay-roll Tax are due to certify the 2020/21 remuneration by 21st July.  This is not just a matter as in addition to wages, salaries, commissions, directors fees, bonuses and so on, Pay-roll tax is also payable on:-

  • Superannuation

  • Some fringe benefits

  • Payments to certain contractors (including some corporates).

Whilst 28th July is the end date for paying the June quarter SG super, payments through clearing houses can take up to 10 days.  We therefore recommend that the June quarter super be processed no later than Friday 16th.

We welcome any question you may have about these matters.

Important SG super changes

As you will have read in our Budget analysis and no doubt been notified by your software provider, please ensure that you are calculating SG super as from July at 10%

It is opportune to remind you that SG is payable on what is called Ordinary Times Earnings (OTE).  OTE is not calculated on a number of items including overtime and some bonuses.  You can read more here.

And in closing just a reminder that the removal of the $450 monthly; threshold is due not to be removed until 1st July 2022.

Payroll processing is complicated.  Moreover errors can prove costly.  We are therefore pleased that Xero now interacts with KeyPay (QuickBooks Online has used a limited version for 5+ years).  Please ask us if you would like a review of your payroll system.

What’s in the Budget for you?

What’s in the Budget for you? 

Probably significantly more than you think.

As what is now unfortunately the norm, there were plenty of pre-announcements before Budget night.  But there is much more to the Budget that was announced on Budget night or leading up to it.

In addition to some key business announcements (extension of loss carry back company rules and instant asset write-off) there were very welcome announcements to being able to getting more money into super.  Welcome I say as how can one provide for retirement with a contribution cap – which currently sists at $25,000 before being eroded by 15% tax, life insurance premiums and for some an extra 15% tax).

Also of note were the proposed changes to personal and self managed super fund residency rules.  I say welcome as the existing rules are quiet archaic in context of how people today live, work and travel – mind you we still aren’t going anywhere for a while with covid.

We will explore some of the key measures in our next survive and thrive webinar.  It will beheld at 5.30pm on Wednesday 2nd June and you can book here – https://tinyurl.com/reg0206

We will also flesh out some opportunities in upcoming blogs.

But having said all that, please keep in mind that:-

  • A Budget is only ever a series of announcements,

  • They still have to be legislated,

  • They may be changed slightly and

  • Many have start dates form July 2021 – and we may have a change of government before then.

Please though don’t hesitate to call us if you any questions.

Urgent SG super reminder

Wednesday 28th April is the end date for satisfying Super Guarantee (SG) super obligations for the March 2021 quarter.

But beware as some of the clearing houses have a submission and payment deadline well before then.  May be even today!

SG super is payable on all forms of remuneration including:-

  • Commissions

  • Bonuses (but see below)

  • Directors’ fees and all other forms of remuneration to directors

  • Allowances (except where fully expended)

  • Contractors paid mainly for their labour

But excluding the following remuneration:-

  • Overtime

  • Reimbursements

  • Unused annual leave on termination

  • Remuneration of less than $450 in a month

  • Bonuses that are only in respect of overtime

  • Bonuses that are ex-gratia but have nothing to do with hours worked; which is harder to satisfy than what you might think

  • In respect of employees younger than 18

  • Employees carrying our duties of a private or domestic nature for less than 30 hours in a week (such as nannies)

  • On quarterly remuneration greater than $57,090

  • Non-residents performing work for an Australian business outside Australia

If your payroll system has been set up correctly then it will perform these calculations for you.  We would welcome the opportunity to assist you with this and if need be refer you to a good book-keeper.

SG super should never be paid late as late payments attract substantial interest and penalties.  Furthermore, and SG (and BAS) liabilities that remain unreported and unpaid after 3 months automatically become personal debts of directors.

The SG rate remains at 9.50%.

So if you haven’t paid your employer super obligations already, we recommend doing so today!

 

Why is the ATO suddenly asking you for money?

If you want someone to pay you then it is a good idea to send them a bill so they can.  Seems like common sense – but not to the ATO.

A number of clients have been surprised, offended and/or doubtful of recent payment requests from the ATO.  This happened as the ATO elected to cease sending paper activity statements.  It seems as though many did not receive a reminder through their MyGov account – or if they did, ignored it legitimately thinking it was a scam.

So will you get into trouble?

The answer is no.

We understand that the ATO will revert to issuing paper statements.

We do though recommend periodically checking your MyGov account just in case you have missed something.  Once you have opened a My Gov account, they will no longer issue you with a physical assessment notice; even we aren’t issued with one.  They also cease issuing super S293 notices and the like.

But never click on a link within a MyGov email as it may well be a hoax.  Log in separately from your internet browser.