Posts Categorized: BAS and super obligations
Wednesday 28th October is the end date for satisfying Super Guarantee (SG) super obligations for the September 2020 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:-
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:-
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 $57,090.
Non-residents performing work for an Australian business outside Australia.
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.
Whilst many businesses cannot claim the PAYG withholding (wages tax) Cash Flow Boost, many more businesses will be able to claim JobKeeper.
Under this stimuli, the government will pay to each qualifying business a flat $1,500 per employee per fortnight. I say business as the scheme is also open to non-employers such as sole traders, partner of a partnership, a beneficiary of trust and one director of a company.
Even the first JobKeeper payment fortnight has already passed, the registration process will start next week. The window for that is effectively open for a very short period of time. Don’t register – no soup for you!
On Monday, will run a webinar in which you will learn:-
LEARNING OBJECTIVE – by attending this webinar you will:-
Effectively we are giving all of this to you on a plate as this has all been built, collated, summarised and systematised on the back of hours attending technical webinars and reading the mountainous pile you can see in the photo below.
Please click on the following link to register for the webinar at 4pm on Monday 20th April:-
Another webinar will be run if there is sufficient overflow. If you can’t attend Monday’s webinar then please action the following matter.
IMPORTANT – you need to register your interest with the ATO IMMEDIATELY if you have not done so already. This interest notification merely advises the ATO that you intend to claim; it is not in itself registration. To register your interest, please refer to our blog at:-
We remind you to keep referring to our web page for important daily blogs, tips and strategies.
It is critical that you keep:-
Lodging activity statements.
Reporting under Single Touch Payroll
Meet your super guarantee obligations
Whilst there are various forms of relief available, you are still required to meet all your ATO compliance obligations.
And whilst there are payment extensions to a certain ATO taxes or some are being waived, there is no extension in regard to employee super. It is also important to note that the two-part penalty of a 200% penalty and non-deductibility of anything paid late remains in place.
Paying employee’s super has always been a business’s number one obligation; now even more so!
The deadline for reporting and paying March quarter superannuation is April 28. As some clearing houses take up to 8 business days to pass on any payment into a super fund, we strongly recommend paying the super by this time next week.
The stimulus packages include such concessions being able to vary the March quarter PAYG instalment to nil (and claim back any instalments paid for the September and December quarters), not paying January to June PAYG withholding and up to a six-month deferral for paying bases, tax shortfalls & FBT liabilities.
We remind you not to lodge your March quarter BAS without speaking with us first.
We take this opportunity to remind you to return to this web page for daily blogs on a variety of short videos and business survival tips (including health and well being).
As we are all in this together, we are determined to help as many business owners as possible. We would therefore appreciate you passing on a link to any article you find of interest to your team, family, friends and business associates.
There are a number of benefits and stimulus incentives that business owners should register for ASAP.
#1 would be to register for the JobKeeper scheme.
Even if you think you don’t qualify or don’t qualify based off March 2020, we recommend registering now.
You can do so at :-
Please return to our web site for other suggested registrations and new stimulus benefits as they arise.
We are also welcome any query you may have.
By far the most common question being asked now by small businesses is am I eligible for PAYG withholding relief?
There have been two announcements with the effective doubling of the concession on the second stimulus package as announced last Sunday.
That package was rushed through Parliament earlier in the week. Whilst we now have some clarity, questions still remain.
To qualify a business must:-
Have an ABN by March 12, 2020. This is an obvious requirement to avoid restructuring.
Make a payment of salary and wages (or directors fees, commissions etc). It doesn’t matter that there may be no requirement withhold PAYG withholding if the wages are small.
Either have (a) lodged the 2019 Tax Return by March 12, 2020 which reports assessable business income or (b) lodged an activity statement for the 2019/20 year which declares business income (which is presumably either sales subject to GST and/or business income subject to PAYG Instalments).
The entity has not engage in a scheme for the sole or dominant purpose of seeking to make the entity entitled to the payment would increase entitlement entity to the payment. In other words, tax avoidance.
The ATO has also stated that they will review sudden changes to the characterisation of payments and investigate whether the payments are in fact wages. This is quite reasonable where PAYG withholding and not been reported and SG super contributions had not been made. We also note that some people who may wrongly trying claim may have a hard time proving so where there is no WorkCover policy in place. This is much easier for the ATO to determine given the introduction of Single Touch Payroll for all employers from July 2019.
However, questions do remain.
In particular, it is very common for a business owner to only draw a salary at the end of the financial year when the business is known to be profitable. It would be most unfair if they were to miss out.
We will post further information when matters are made clearer.
In the meantime:-
We would be happy to answer any question you may have.
Ask you to keep returning to this section as blogs will be posted at least twice daily
The main plank to the first and second government stimulus packages has been the announcement of tax-free payments to employers.
It is been incorrectly reported as a payment to employers.
However, there will not be a payment in all cases.
It will be either:-
Larger employers will not pay the first $50,000 of PAYG Withholding in respect of the months January to June inclusive (they can also benefit in the first half of 2020/21 but we will cover that in a future blog).
Employers who withhold less than $10,000 of PAYG Withholding per year, they will receive a minimum credit of $10,000. If that $10,000 is greater than the other BAS liabilities, then the balance will be paid to the employer.
For those that report PAYG Withholding monthly, they can claim the credit for January and February on the March BAS.
The ATO best describes this as a Cash Flow Boost.
Employers will still be allowed to claim all of the PAYG Withholding as a tax deduction – even though it is not paid.
Employees will still be allowed to claim a tax refund for all of the PAYG Withholding reported – even though the employer has not paid some or all of it.
The ATO has stated that they will pay refunds within 14 days.
Please come back to read updates on how you can benefit from this concession. We also welcome any question you may have.
An employer who is late in paying their super must pay it to the ATO on an SG Super Charge Statement.
An admin charge and lost earnings component are added to the amount payable. Worse still, the total amount paid is not tax deductible. As we always say super liabilities are the liabilities you pay first.
Last week the SG Amnesty laws were passed by Parliament. This amnesty allows employers to report and pay any underpaid super and do so without the usual penalties.
What it also enables is those that have previously lodged a SG Super Charge Statement to seek a refund.
We welcome the opportunity to assist you with this and will provide guidance once we have been trained on the amnesty.
The Senate passed the SG super amnesty bill last week. All that is required now is for it to receive royal asset after which it becomes operational law; that process usually only takes a few days.
This amnesty allows employers to come forward and declare underpaid SG super and do so without the normal (hefty) penalties.
It has been quite a political journey to finally get to this stage. The bill was first introduced into Parliament two years ago. It never received support and lapsed with last year’s election.
We are pleased that it has been passed as we believe many employees will benefit. Whilst we are abhorred and disgusted by those employers who don’t pay any of their compulsory super obligation, there are many cases where innocent oversights have resulted in relatively minor under payments. This amnesty should see a considerable amount of super paid to the benefit of employees.
Full details of this amnesty have yet to be explored and analysed. We await training on this and look forward to explaining more in due course.
We strongly encourage all employers to not miss this opportunity.
All employers should review their level of compliance since 1992. Why 1992? Well the system was introduced in July 1992 and the ATO can go back audit any period they like. And one thing about an amnesty; once they are over, the ATO comes out with baseball bats.
We welcome any question you may have but look forward to explaining more shortly.
Don’t forget to register for GST! If you don’t it could be costly.
The GST registration threshold for businesses that are not non-profits and taxis is $75,000. If your annual turnover exceeds $75,000 and you are not registered, then the ATO will demand you pay them 1/11th of your turnover.
It can prove rather costly!
Where turnover is not seasonal, we recommend that clients register once their turnover exceeds $6,000 per month. And sometimes earlier if they will soon be at the limit and have good accounting processes (which we can help set up).
Not sure what is best for you – call us for a free discussion.
Am I required to register for GST is a question we often get. The answer is that it depends.
If you operate a business, you are required to have an Australian Business Number (ABN). But this doesn’t mean you have to also register for GST.
Whether you have register depends on your turnover (sales/fees, etc). You must register your for GST if your annual turnover exceeds $75,000 ($150,000 for non-profit organisations; taxi drivers are required to register for GST irrespective of their turnover).
Sounds clear cut – not really!
Annual turnover is defined as being for the current month and the next 11. That’s right, you are expected to be a clairvoyant! That said, one should register once their monthly turnover starts exceeding $6,000 per month – with separate consideration for seasonal business.
Should I register if my turnover is under $75,000?
Well that depends on a number of considerations such as:-
Do I want to look bigger to my customers?
Are my customers the public or businesses? If they are the public, then your price goes up by 10% (but you get to claim back any GST paid). If they are the business, then they can claim back any GST claimed.
If you supply a GST free service such as food and medical supplies, then you won’t charge GST but you will get o claim back GST.
Am I going to be able to efficiently run a proper accounting file in order to track and report GST?
So what is best for you? We would be happy to discuss your situation – please call us.