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,

Covid-19 Advice for Employers

Employers are facing unprecedented changes to the way of working, and many employers are having to do this with little or no preparation for such adversity.

The Fair Work Ombudsman has updated their information on Coronavirus and Australian workplace laws to provide advice to employers on managing the situation. The advice is general in nature and reminds employers that the usual provisions of the Fair Work Act apply.

It is important to note that the Fair Work Act does not have specific provisions or rules for a situation like this, that has such an unforeseen effect on business and employers.

Employers and employees need to come to their own arrangements. Employers must communicate with employees what their policies will be in this situation, making sure that they are lawful within the Fair Work Act provisions.

The Fair Work Ombudsman provides guidance on many topics including:

• Health and safety in the workplace.
• Directing employees to stay away from the workplace.
• Quarantine and self-isolation.
• Working from home.
• Casual employees and independent contractors.
• Redundancy and reduction of hours.

Essential Information for Employers

There is a great deal of information being published, and we encourage you to stay updated with the official websites.

• Australian Government Coronavirus Health Alert – daily updates of the current status, essential information and advice.
• Fair Work Ombudsman Coronavirus and Australian workplace laws – workplace entitlements and obligations.
• Fair Work Ombudsman hotline – 13 13 94 and select the option for Coronavirus.
• Check your local Chamber of Commerce or state government website for dedicated employer guides.

What you need to do

We suggest you write a policy and plan for the business management of Covid-19 and provide this to employees as soon as possible. This should include guidance on working from home, productivity measures and expectations, personal hygiene, workplace safety, flexible working, user access to relevant tools and technology, leave policies, online security and safety, team communications, as well as any procedures or policies relevant to your business and industry in this situation.

Remember, stay safe and maintain connection and communication with your employees throughout this challenging time.

Need help navigating the support packages available?

Talk to us. We are here to help.

Gift cards and vouchers now have three year expiry

Gift vouchers can be a great way to attract customers, maximise marketing campaigns and increase sales - so long as you don’t get caught out by the new rules.

Does your business offer gift cards or vouchers? If so, new laws came into effect on 1 November 2019, which you'll need to adopt. Gift cards and vouchers issued on or after 1 November 2019 must meet the new requirements of the Australian Consumer Law (ACL).

New Gift Card Laws

• Mandatory minimum expiry period of three years from the date of issue.
• The actual expiry date must be listed on the card; alternatively, the supply date and expiry period, for example, “Valid for 3 years from 11/02/2020”.
• Post-purchase fees are no longer allowed. Payment processing fees may be allowed, however activation, top-up, account keeping or balance enquiry fees are not.

There are some situations in which the new requirements don’t apply, for example if the card can be topped up, if it is part of a temporary marketing promotion or if it is donated free of charge for promotions. Visit ACL New Gift Card Laws webpage for full details.

If you have not met the new requirements on vouchers issued since 1 November, the new laws will still apply even if the actual voucher does not. Customers will be able to redeem the voucher within the three-year expiry regardless of what is stated on the voucher. Gift cards and vouchers issued before 1 November 2019 have the same expiry period and conditions of purchase as at the time of purchase.

What Next?

1. Review your gift voucher terms and conditions.
2. Update your printed and online vouchers and related marketing material.
3. Check the information published on your website and social media.
4. Make sure your internal processes and point-of-sale systems are brought up to date and remember to tell your staff of the changes.

We can help you.

​Talk to us about how the changes affect your business operations and cashflow, or how to implement gift cards in your business.

Modern award annualised salary changes

Recent changes made by the Fair Work Commission mean that you need to review employment agreements to ensure they are compliant with the award requirements.

The Fair Work Commission (FWC) late last year has varied a number of modern awards that include annualised salary provisions. The decision has also introduced the provision for annualised salaries into some other awards for the first time.

Whilst the actual specifics of the annualised salary provisions vary per award, there are some significant changes that affect all award terms in relation to annualised salaries. - We can help with the red tape.

What is an Annualised Salary?

Some awards permit employees to be paid an annual salary that covers all payments such as allowances, penalty rates and overtime. For many employers and employees, this has been a flexible and practical solution to avoid the need for timesheets and extra payroll administration.

The important changes

The changes may affect the ease and efficiency of your current payroll administration, as there are now extra records required for all employees paid an annual salary under an award provision. Note: this does not affect employees with a common law employment contract.

• The agreement or arrangement must document the specific provisions of the award that are addressed.
• The agreement must include reference to overtime or other penalty rates the employee would otherwise be paid, specified as an ‘outer limit’, or maximum number of such hours to be worked in each pay period. Outer limits must be specified separately for overtime and hours that would be subject to a penalty or loading.
• Records of hours worked (and unpaid breaks) must be kept for each pay period and signed by the employee.
• The employee must be paid for any extra hours that exceed the ‘outer limits’ as defined in the annual salary agreement.
• Check the relevant award to see if an employment agreement is required. In some awards the employer can implement an annual salary arrangement without an employee agreement.
• Document the calculation of the annual salary according to the requirements of the award. It is vital that the calculation shows that the employee is receiving at least as much as if they were paid according to the award hourly rates, including all wages, allowances, penalties, overtime and loadings. This will require breaking down the salary into its separate components.
• Employer and employee must complete an annual salary review on the anniversary of the agreement or arrangement.

What you need to do now

1. Make sure you are aware of the applicable modern award and check the annualised salary provisions.
2. Check that the current annualised salary arrangements meet the new requirements of the award.
3. Document the calculation as per the award conditions.
4. Update existing agreements or implement new ones as needed.

The new provisions came into effect on 1 March 2020. Employers need to review all existing agreements for annualised salaries as soon as possible.

You will also need to consider the impact of the new requirements on your payroll administration and software.

There are many payroll software add-ons that can help to make administration easier if your current software does not have the required record-keeping tools built in.

We can help you.

Contact us to arrange a time for a payroll compliance review.

Reporting PAYGW Correctly 

PAYG and claiming tax deductions

From July 1 2019, If you don’t meet PAYG withholding obligations for your workers, by not withholding tax from their payments and not reporting it to the ATO, you could lose your tax deduction.

This will apply to income tax returns lodged for the 2020 financial year and beyond.

If you withhold tax from payments to workers, you must withhold the required amount and report correctly to the ATO in order to receive a tax deduction for your business.

PAYG withholding and reporting obligations apply to payments for:

Withholding rules still apply to cash payments. Similarly, for non-cash payments such as property or exchange of services, withholding rules still apply even if your worker agrees to receive a non-cash payment in place of money.

PAYGW

The payment of PAYGW to the ATO is a separate issue. The new rules are aimed at getting employers to report correctly and on time. Once you have reported an amount to the ATO, they expect payment of that obligation by the due date.

If you make an honest mistake, such as treating an employee as a contactor, you won’t be penalised. You can correct your mistake by lodging a voluntary disclosure

Talk to us

Contact us to review your PAYGW reporting obligations. 

Employee Payment Summaries are due soon - for the last time!

The end of the payroll year will be here sooner than you think! We can help make the process easier by reviewing and validating your payroll figures prior to issuing payment summaries by July 14.

Once you start reporting under Single Touch Payroll, you will no longer be required to issue a Payment Summary. Your final payment summary to employees is due 14th July. After this date your employees can access their income statement through the ATO via myGov.

You’ll have two weeks from the end of the payroll year to issue your payment summary so it’s worthwhile preparing now to make the process easy.

Here’s what you will need:

Payroll Ch​​​​ecklist

• Make sure you have all the necessary details for all employees, both current and any who have terminated throughout the year. The essential information is full name, date of birth, address, tax file number, and an email address if you are sending payment summaries electronically.
• Review any terminated employees. Is the correct termination date recorded in your software? Are there any Employment Termination Payments (ETPs)?
• Review allowances paid to employees and check which ones are required to be reported separately.
• Review salary sacrifice payments to superannuation for Reportable Employer Superannuation Contributions (RESC) amounts.
• Check any Reportable Fringe Benefit Tax (RFBT) amounts that should be included.
• Do you plan to email payment summaries to employees? If so, advise employees of your intention to provide electronic versions and make sure the email address is secure and private. The electronic version must be non-editable and preferably generated directly from your payroll software.

Verify Your Payroll Numbers

It’s important to verify payroll figures before issuing payment summaries, in order to minimise the chance of errors and having to re-issue at a later date.

Once the payroll year is finalised at 30 June, you can then focus on analysing the payroll amounts for each employee and cross-checking against the numbers in your profit and loss accounts.

The end of the payroll year will be here sooner than you think! We can help make the process easier by reviewing and validating your payroll figures prior to issuing payment summaries.

Remember, this is the last year you will need to issue payment summaries. 

From 1 July, all employers must report to the ATO using Single Touch Payroll (STP).

Do you need more information about STP? We can help you set up your payroll ready for STP reporting.