Posts Tagged: ATO; travel expenses

Reasonable travel allowances & how they help you

It is now time for Victorian employers to lodge their annual Pay-roll Tax declaration. One of the dangers of Pay-roll Tax is not complying with grouping provisions.

The grouping provisions assess a number of employers against the remuneration threshold (now $650,000). Remuneration in excess of that threshold is subject to Pay-roll Tax at 4.85%.

Employers can be assessed as a group where:-

  • There is common ownership and control, or
  • Where an employer performs duties for another business.

The latter one is commonly misunderstood. Having a larger business answer the phone of a smaller business (with unrelated owners) for 30 minutes over lunchtime can be enough to treat a business as grouped.  So it could be that a small business with remuneration of only $100,000 has to pay Pay-roll Tax of $4,850 for the sake of 2 ½ hours a week of phone minding.  A phone answering machine or service would seem to make more sense!

If you would like to know more about grouping, you can go to:-

https://www.sro.vic.gov.au/grouping

You can also watch the Victorian State Revenue Office’s video on grouping at:-

https://www.sro.vic.gov.au/videos/payroll-tax-grouping-provisions-webinar

With we welcome any question you may have in respect of this or any other employment related matter.

Travel expenses made simple

Travel expenses made simple. Most would disagree as keeping, and at times even getting receipts when you’re travelling is difficult.  This is a problem that is even more difficult in respect of getting employees to hand over the right records.

Fortunately, the ATO provide some relief. Each year, the ATO issues what are called reasonable travel rates; the determination also covers overtime meal allowances.

Reasonable travel rates are set for:-

  • Domestic travel – amounts in respect of overnight stays for accommodation, food & drink and incidentals.  These amounts vary for each major centre and high cost remote areas.
  • Overseas travel – amounts for food & drink and incidentals (receipts must be kept for all accommodation).  Allowance rates vary for each country and the employee’s salary level.

Employers who pay no more than these reasonable amounts are set by the ATO do not have to withhold PAYG withholding.

Employees who receive a reasonable allowance are not subject to substantiation unless their expenses exceed the reasonable amount.  You can obtain a copy of the 2016/17 rates at http://tinyurl.com/jft95s2

Please always remember that an overseas travel claim is not deductible unless it is supported by a travel diary or record.  The same applies in respect of a domestic trip which is for 6 or more nights.

We would welcome your questions as to how you may benefit from using this system.

 

At MRS, we will spend today planning for your success tomorrow.