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Streamline your business administration with digital record keeping

Streamline your business administration with digital record keeping

Streamline your business administration with digital record keeping

Good record keeping is the mainstay of accounts management. It assists you to both meet your compliance obligations and provide verification for all your business transactions.

The Government requires that relevant records exist to support all business transactions – purchases, sales, payroll, and other business matters such as loans or foreign currency dealings. It is a business owner’s responsibility to maintain and store accurate records for all financial transactions.

Did you know that you are allowed to store all business records digitally? This is both more efficient and sustainable than having to keep years’ worth of paper records at your office.

The most important thing to take care of if you are moving to electronic record keeping is the security of your information.

Using cloud accounting platforms, such as Xero, with add-on apps and systematic electronic record keeping makes it so much easier to run your business. 

This is because you will not waste time trying to find documents when you need them; whether that’s for yourself, your bookkeeper or your tax agent.

Most government departments allow business records to be either in paper or digital format. The legal requirements for record keeping are the same, regardless of format.

All records must be:

  • True and correct
  • Unaltered once stored
  • In English and legible
  • Stored in a secure system, whether physical or digital
  • Easily accessible if required
  • Held securely for the statutory five to seven years, depending on the type of record.

For best protection, store records both locally on your business computers and secure external online storage. This makes the records easily accessible from anywhere at any time.

Always take care of who has what level of access to your documents and manage user access accordingly.

If you need help understanding which apps will work with your business systems, we'd love to hear from you.

PAYGW and PAYGI

What’s the Difference Between PAYGW and PAYGI?

What’s the Difference Between PAYGW and PAYGI?

Many people running a business and employing people are unsure about the difference between PAYGW and PAYGI.

They are not the same thing!

PAYG stands for ‘pay as you go’. This is the means the ATO uses to obtain tax payments from both employees and business owners.

Paying tax ‘as you go’ throughout the year means you don’t have to pay it all in one lump sum at the end of the tax year.

PAYG Withholding for Employees Income Tax

PAYG withholding refers to the income tax an employer withholds from employees’ gross wages to meet their personal income tax liabilities.

Employers are required to remit the employees’ withheld tax to the ATO each month or quarter, with the business activity statement (BAS) or the monthly instalment activity statement (IAS).

PAYG withholding applies to payments employers make to employees, directors, office holders and labour-hire workers.

PAYG can also be withheld from non-employees: contractors with a voluntary withholding agreement, some payments to foreign residents and payments to suppliers where an ABN has not been quoted.

PAYG Instalments for Business Income Tax

If you run your own business, you'll need to plan for income tax payments once you make more than the taxable threshold.

PAYG instalments allow you to pay an amount towards an expected tax bill. Amounts are based on business or investment income from the previous tax year.

Once you complete your tax return, the amounts already paid are offset against the total amount of tax due. You will then receive either a bill for extra tax or if you have paid too much, you will receive a refund.

Usually, when you start in business, you don't pay any tax instalments until you have completed the first year’s tax return.

However, if you’re new to business, you can voluntarily enter into the PAYG instalment system to start contributing towards your next tax bill. This is worth considering if you have done better than expected in your first year!

You can pay PAYG instalments by using the ATO determined amount based on information in the last tax return (instalment amount) or using the ATO defined percentage rate applied to your income (instalment rate).

The first method is the simplest; however, if your income varies a lot from one quarter to another, it may be better to use the instalment rate so you know you have put aside the correct amount based on your actual income.

PAYG Planning for Cash Flow

If you’re in business or considering employing people soon, you’ll need to plan for PAYG instalments and possibly PAYG withholding so you can meet your ATO tax reporting and paying obligations. 

Planning ahead means you’ll never be caught short with cash flow difficulties.

Talk to us to learn more about income tax responsibilities as an employer and business owner

What value can automation bring to your business

What value can automation bring to your business?

What value can automation bring to your business?

Automation has the capacity to revolutionise your efficiency and productivity. But how many of the automation features that are available to you are actually being used?

Could you be getting more value by building automated processes into your operational framework?

Removing the manual workload to streamline your processes

There’s a very simple mantra when it comes to making the most of automation

If there’s a manual task in your business that’s taking up time, automate it now!

The more time you and your team spend on low-level administration, data-entry and form-filling, the less time you have available for actually running your business.

With your software tools maximised, your automated processes can be chugging along in the background, doing the heavy lifting and freeing up your time to focus on client service, sales and strategy etc.

So, which elements of your everyday operations could you be automating? And which apps and software solutions can help you to achieve your automation goals?

Here are some areas where automation and smart systems can really help to add value

Automated bookkeeping and digitisation of paperwork

Apps like Dext (formerly Receipt Bank) offer you the opportunity to automate your bookkeeping and record-keeping. These solutions let you snap a photo of a receipt or invoice, digitise the contents and then automatically create an expense claim or bill in your accounting system. There’s no keying in and the whole process is synced with your choice of cloud accounting platform.

Automated employee expenses

Apps like DiviPay give you automated control over your employee expenses. Using either virtual or physical credit cards, your staff can pay for expenses and payments are then automatically synced with your main accounting platform.

That means no late expenses claims, no need for petty cash and no wasted time keying in the receipts. All employee expenses can be tracked, measured and paid, with the whole expenses process automated from start to finish.

Automated payment collection from your customers

With payment gateways like Stripe and GoCardless you can automate your cash collection. By using a modern payment gateway, you make it easier for clients to pay their bills. 

But you also automate the actual cash collection and bank reconciliation process too. Money can be instantly paid to your main business account and all the transactional data pulled across to your accounting platform. That means less admin, and faster payments too.


Automated marketing and social media posts

Digital marketing is key to finding customers and growing your business. You can automate a large chunk of your marketing work. These solutions let you create automated emails, target specific customer audiences and track your return on investment (ROI) in forensic detail.

Talk to us about understanding the different App options to help you automate your business.

Employing Casuals? Here’s What You Need to Know About the New Rules

Employing Casuals?

Here's what you need to know about the new rules.

Casual Employment New Rules from March 2021

The Fair Work Act 2009 has been amended to enforce several new rules for employing casual workers.

The Act includes a statutory definition of casual employment, a pathway for casual employees to become permanent, and a Casual Employment Information Statement (CEIS).

Definition of Casual Employee

A casual worker does not have an agreed pattern of work or an advance commitment to ongoing work from the employer. Therefore, there is no consistent or guaranteed work schedule, and the employee is paid an hourly rate plus casual loading according to the relevant modern award.

If you require employees to agree to a regular roster well in advance of scheduled work and rely on them as an integral member of your team, talk to us about whether the employee should be considered a permanent employee. True casuals can choose whether or not to work when you offer them shifts.

Permanent part-time and full-time employees have a set roster of work and a commitment from the employer to ongoing work. For full details of casual employees, visit the Fair Work Ombudsman Casual Employees webpage.

Casual Conversion Pathway to Permanent Employment

Employers of casuals are now obliged to offer casual workers the option to convert to permanent employment after 12 months of employment if the pattern of work has been regular and systematic during the last six months.

Some modern awards already have clauses that allow employees to request permanent work. The Act overrides individual award provisions and means that employers must now actively offer conversion to casual workers who meet the criteria for converting to a permanent position.

If there are reasonable business grounds for not making an offer of permanent employment, the employer must notify casual employees.

Casual Employment Information Statement

Employers must now provide the CEIS to all casual workers upon starting work. You must also continue to provide the National Employment Standards and Fair Work Information Statement. Visit the FWO Casual Employment Information Statement webpage for details and to download the form for your employees.

The CEIS outlines the rights of casual workers to become permanent employees in certain circumstances.

Review Your Casual Workforce

The rules around reasonable business grounds, when employees can refuse an offer, time constraints, and transitional provisions are complex.

First, check your employment contracts to make sure they meet the new definition of casual employment.

Then, put in place a process for assessing casual roles at the 12 month anniversary of the employee start date.

You’ll need to keep detailed records for casual employees to ensure you are complying with the changes.

Talk to us if you’d like assistance with managing your casual workforce payroll.

Payroll Updates

Payroll Updates

Navigating Payroll? We can help keep you up to date on changes this year, including new rules for casuals.

Minimum Wage Increase - 1 July 2021

The national minimum wage increases on 1 July by 2.5% to $20.33 per hour (or $772.60 per week).

The minimum wage increase applies to employees if an award or national minimum wage defines their pay rate.

This year, the Fair Work Ombudsman (FWO) has implemented minimum wage increases to awards in a staggered approach. Most awards increase on 1 July; however, the Retail Award will increase from 1 September, and a few awards will increase on 1 November.

For full details of award increases, visit Fair Work Ombudsman Annual Wage Review 2021.

Changes to Casual Employment

The Fair Work Act has been amended to include a Casual Employment Information Statement (CEIS), a formal definition of casual employment, and a pathway for casual employees to become permanent employees.

Employers must now provide the CEIS to all casual workers upon starting with the employer, along with the National Employment Standards and Fair Work Information Statement.

Visit the FWO Casual Employment Information Statement webpage for details and to download the form for your employees.

For more information about casual employment definition and the options for becoming a permanent employee, visit FWO Changes to Casual Employment to check if you have to offer permanent positions to your employees.

Superannuation Increase from 1 July 2021

The superannuation guarantee statutory rate increases to 10% from 1 July. Your payroll software should automatically capture the changes, but check the rate is correct when you do your first pay runs in July.

Review any agreements or annualised salary arrangements you have with employees that may be inclusive of superannuation.

Single Touch Payroll Finalisation

The ATO recognises the impacts of COVID-19 on the Australian community. If you need additional time, you can complete your STP finalisation up until 31 July.

For an employer with a mixture of both closely held payees and arms-length employees, the due date for end-of-year STP finalisation for closely held payees is 30 September each year. All other employees are due 14 July each year.

Small employers (fewer than 19 employees) that only pay closely held payees have until the payee’s income tax return due date.

Review Your Payroll Systems

The start of the financial year is the best time to review your payroll setup, policies and costs.

Talk to us if you need to implement payroll policies, review payroll costs or update your casual worker details.

And we can help you get the STP finalisation done on time. Getting it right the first time means your employees will have accurate information for their tax returns.

We can also review your pay setup and make sure it’s right for the start of the new financial year.

Let's make a time!

vaccinations and the workplace

Vaccinations and the Workplace

Vaccinations and the Workplace

The Fair Work Ombudsman (FWO) has released guidance for employers on vaccinations and the workplace.

Currently, there are no laws in place that allow employers to order existing employees to be vaccinated against the coronavirus. The Australian Government policy is that vaccinations are voluntary. Each state and territory government is responsible for implementing vaccination plans.

There are some circumstances in which an employer may require existing or potential employees to be vaccinated, but most employers cannot enforce vaccinations. If there are state or territory laws that provide specific orders requiring vaccination of certain workers, then employers and employees must comply. However, the FWO states that no such orders exist right now.

Employers need to check Fair Work Act workplace protections and discrimination protections before making changes to any employment agreements to require vaccinations. Employers should also discuss any proposed changes to agreements with employees, including options for implementation and safe work practices.

The Fair Work Ombudsman COVID-19 Vaccinations & the workplace webpage has detailed information explaining rules about many aspects of vaccinations in the workplace. Visit the webpage to get details on when an employee can refuse, asking for evidence of vaccination, disciplinary action and lawful directions.

The Department of Health has a great tool to check eligibility for priority vaccinations for high-risk workers such as emergency services, border services, frontline healthcare or aged care and disability workers.

Safe Work Australia provides industry-specific information, including risk assessment and worker consultations. An employer has a duty to eliminate or minimise the risk of exposure in the workplace by cleaning, distancing and hygiene information.

Many employment situations may require legal advice before the employer can make any changes to vaccination policies.

Don’t get caught out by making unlawful changes to your workplace! Review your employment agreements and look at your options for keeping your workplace safe.


Single Touch Payroll Reporting for Closely Held Payees Mandatory from July

Single Touch Payroll Reporting for Closely Held Payees Mandatory from July

Closely held payees must be reported via Single Touch Payroll from July 2021. Now is the time to get organised.

Does your business make payments to closely held payees? If so, you will need to start reporting these payments via Single Touch Payroll (STP) from July 2021.

Closely held payees include family members, directors or shareholders of a company and beneficiaries of a trust.

If you’re already reporting employees via STP, then it will be easy to include the extra payees from July.

If your business only pays closely held payees then you may not have signed up for Single Touch Payroll. If not, now is the time to establish a reporting solution.

Typically, closely held payees are paid amounts on the advice of the tax agent, and often these amounts are not calculated until they do your tax return. In this situation, the business can report estimated amounts via STP.

Three Ways to Report Payments to Closely Held Payees

Report actual payments on or before the date of payment if you lodge your own STP reports through your ATO business portal.

Report actual payments quarterly when the activity statement is due. This option is available if you have a BAS or tax agent lodge on your behalf and they already have the ATO quarterly reporting concession in place.

Report a reasonable estimate quarterly. Estimates should be based on amounts equal to or greater than 25% of the previous year’s payments.

If you’re reporting quarterly estimates, it’s important not to underestimate amounts to be paid, as the business may later be liable for superannuation guarantee late charge and penalties.

Small employers have until the individual’s tax return due date to submit the STP finalisation declaration. (For all other payees, the finalisation is due by the usual date of 14 July).

If you’d like help with Single Touch Payroll reporting for your closely held payees, talk to us about planning ahead for lodgement and calculating estimates. We’ll help organise your systems so you’re prepared for STP reporting obligations,

Five benefits of outsourcing your Payroll

Five benefits of outsourcing your payroll

When it comes to running a business, time is an irreplaceable commodity and we are seeing more and more businesses start to outsource specialist or essential services. If you employ people, then payroll is both a specialist and essential service.

Why?

Because outsourcing payroll allows business owners to focus on their strengths and core business, leaving the complexities of systems and compliance to experts.

With the right team behind you, the benefits of outsourcing your payroll can be realised almost immediately.

Here are five benefits of outsourcing your payroll.

1. Save time

By outsourcing your payroll, time spent on compliance, regulations, and training staff on using internal systems is eliminated. Cloud-based payroll services can also eliminate time spent by HR updating entitlements, leave and benefits.

2. Save money

Having fewer full-time employees can cause a ripple effect on cost savings throughout an organisation, from HR and IT through to office space and utilities. Outsourcing to payroll services providers reduces the cost of hiring and retaining specialised staff – two activities that are expensive and increasingly seen as unnecessary.

3. Compliance

For many small business owners payroll isn’t a core competency. And that means the complexity of work place agreements and EBAs increases the risk of costly errors. Keeping up with the Australian government’s National Employee Standards (NES) vigilance and expertise to remain compliant.
Outsourcing to a specialist payroll provider ensures that the minimum standards are adhered to.

4. Simplified reporting

Outsourcing payroll provides complete transparency and access to accurate information that doesn’t need to be verified. Simplified reporting means, as a business owner, you can more effectively plan for growth and predict changes to your staffing needs.

5. Avoid losing payroll expertise

Outsourcing your payroll means your business maintains a consistent approach to payroll management. There’s no need to induct employees and role transfer can be reduced to the functions and outputs of the payroll service.

At the end of the day outsourcing payroll services allows you to focus on the aspects of your business that generate revenue.

Talk to us today about outsourcing your payroll so you can invest in strategic resources that increase value and drive the growth of your business.

contractor or employee

Contractor or Employee

Contractor or Employee 

What You Need to Know

Should your staff be contractors or employees?

There are many factors to assess and, as a business owner, it’s your responsibility to get it right.

So, what is the difference between a contractor and an employee?

An employee

  • works in the business and is integral to that business
  • has rights and entitlements under the Fair Work Act 2009
  • has a reasonable expectation of ongoing work, agreed hours and duties
  • is covered by the employer’s workers compensation insurance
  • is paid superannuation guarantee.

A contractor

  • is actively running and advertising their own business
  • is responsible for their own insurance, equipment, licenses and tax
  • has a high level of independence, discretion and control as to how and when the work is performed
  • is able to delegate work
  • is liable to fix mistakes at their own cost
  • may or may not be paid super depending on the nature of the work engagement.

It is the business owner’s legal responsibility to determine the nature of the work and the correct basis of engagement. We can help you get it right.

Multi Factor Test

There are many factors involved in deciding whether a worker is an employee or contractor. And the guidelines must be applied individually to each working relationship.

There is no single overriding factor, rather, the totality of the working relationship and nature of the work being done is taken into consideration.

Sole Trader as a Contractor May Not be Right

When sole traders are engaged as contractors, the business owner needs to check whether they really meet the criteria for being engaged as a contractor. Many sole traders engaged as contractors are not actively carrying on a business, and do not have the level of independence that a contractor should have. This is even if they have their own ABN. 

Sole traders are often engaged for their own services and labour. However they are not free to delegate the work to someone else and must work under the direction of the employing business. In this case, they should be engaged as an employee and not a contractor.

Factors to Consider

This is not an exhaustive list but some of the main factors to assess.

  • Is the worker engaged to achieve a specific result or are they engaged for their labour?
  • Are they able to delegate their contract to another worker within their own business?
  • How much choice do they have in where, when and how the work is performed?
  • Is the service integral to the business?
  • Do they advertise services and accept work from other businesses?
  • Who is liable to fix damages or mistakes?

Contractor or Casual Employee?

If you are not sure whether a worker is an employee or a contractor, check the ATO Employee or Contractor information first.

It’s okay to engage a worker as a contractor initially and to reassess the engagement three to six months later if the situation is unclear.

However, at that point, if the worker does not meet the contractor definition and you don’t need a permanent employee, put them on as a casual employee. This is often the best solution for both parties.  It means the employer is compliant with tax, super and employment laws. Plus the worker retains some flexibility while being paid super and having tax taken care of.

The ATO and the Fair Work Ombudsman are particularly concerned with the validity of sole traders treated as contractors. This is because they are the workers most frequently disadvantaged by being classified incorrectly as a contractor when they in fact meet the test for being an employee.

Get it Right to Avoid Penalties

A business that should have engaged a worker as an employee will be liable for back-payment of entitlements (such as leave, overtime and allowances), and superannuation.

Some situations are straightforward to work out. But many contractor or employee decisions are not so easy with so many factors to consider.

Let us help you get it right and sort out the tax and superannuation obligations for all your workers whether contractors or employees.