As the end of financial year is approaching, it is important to be aware of your requirements as an employer to ensure you are meeting your obligations.
This year there are new ATO requirements for Single Touch Payroll and recent Minimum Wage increases handed down by the Fair Work Commission that need to be considered in addition to all of the normal year end processes.
Single Touch Payroll
Last year businesses that employed 20 or more employees were required to start lodging their pay events to the ATO after every pay run. This year, on July 1, businesses with 19 or fewer employees will need to report. This means that essentially every Australian business will be reporting using STP.
Currently employers pay super and PAYG monthly or quarterly with the super funds reporting the contribution data to the ATO annually and PAYG being reported via the BAS or Income Activity Statement.
STP requires super and PAYG to be reported when each pay run has been processed. This will enable the ATO to monitor payments and step up compliance.
The collection of superannuation contribution data through STP will also enable the ATO to display this information on the employee’s myGov account, providing employees with easier access to information about their superannuation via the same government platform that houses much of their taxation, medical and other records.
Annual Payment Summaries – Single Touch Payroll
Employers who have commenced lodging Single Touch Payroll reporting to the ATO will no longer have to provide Annual Payment Summaries for their employees.
You will have until 31 July to ‘finalise’ your employees’ EOFY payroll information through your STP enabled software for the 2018-19 financial year. You can also finalise this information as soon as it is ready after 30 June.
You are no longer required to lodge a payment summary annual report for the amounts reported through STP as long as you complete the finalisation declaration by the finalisation date.
You need to tell your employees:
- you will not be providing them with a payment summary
- their payment summary information will be called an income statement in ATO online in myGov
- they will need to log into their myGov account, select ATO online services, click on my profile, select my employment and then income statement to access this information
- if they use a registered agent to lodge their income tax return, their agent will receive their income statement information directly from the ATO
- if they don’t have access or cannot create a myGov account and don’t use a registered agent they can call the ATO on 13 28 61 and this information will be provided to them.
If your employees need help creating or logging in to their myGov account and linking to the ATO’s online services, they can access helpful information on the ATO website.
Annual Payment Summaries – Getting It Right
No matter whether you are reporting to the ATO via Single Touch Payroll or providing Annual Payment Summaries to your employees for the final time this year. It’s important to make sure that your payroll categories are properly aligned to the ATO’s requirements.
A common mistake is to misreport allowances, and this can have a significant impact on your employees’ income tax assessment. Also don’t forget to correctly allocate salary sacrifice superannuation and fringe benefits.
The ATO provides detailed guides on completing your Annual Payment Summaries.
Minimum Wage Increase
On the 30th of May, the Fair Work Commission handed down its annual wage decision.
Effective the first full pay period on or after 1 July 2019 the National Minimum wage will increase by 3%, bringing it to $740.80 per week or $19.49 per hour. This is an increase of $21.60 per week.
In addition to this, all modern award minimum wages will increase by 3%. The wage rates in Modern Awards are expected to be updated in the coming week.
All employers should ensure that employees who are covered by an award are paid the minimum hourly rate specified in the applicable award for the work they perform. Any increases should be applied by the first full pay period on or after 1 July 2019. It is best practice to notify employees in writing of any changes to their rate of pay.
Liquid HR can provide you with advice in relation to employee minimum wages, entitlements and award coverage – Contact us. We also offer an outsourced payroll solution, to allow you the time to focus on what is important – your business. For further information visit https://liquidhrpayroll.com.au/
Alternatively, speak with one of our HR Consultants for further information on 1300 887 458.