Update Archive
Changes to Casual Employment
Friday 11th December 2020
Expected upcoming changes to the Fair Work Act are set to affect millions of Australian casual employees. Read this article for more information.
Superannuation Obligations
Thursday 6th August 2020
If you have ever been late in meeting your Superannuation obligations please read the below.
The partial amnesty for voluntary disclosure of superannuation shortfalls up to the quarter ending 31 March 2018 has a final deadline of 7 September, 2020.
As part of the amnesty taxpayers can correct past non-compliance with their SG obligations without administration charges or significant penalties being imposed.
Further details are explained below. Any action to take advantage of the expiring amnesty needs to be taken now.
We would like to bring to your attention the importance of paying your employee’s superannuation guarantee obligations on time.
Due to the introduction of Single Touch Payroll and improvements in superannuation funds reporting, the ATO now has near real-time data to show employer’s compliance with their superannuation guarantee obligations. This means that the ATO will know of, and are currently taking action on, late payments of superannuation obligations. Now, more than ever, employers risk detection of non-compliance given the volume and detail of data available to the ATO.
What are your superannuation guarantee obligations?
Generally, if you pay an employee $450 or more before tax in a calendar month you are obligated to pay the super guarantee. The super guarantee:
- Is currently 9.5% of an employee’s ordinary time earnings
- Must be paid at least four times a year by the quarterly due dates
- Must be paid and reported electronically in a standard format ensuring you meet SuperStream requirements
- Must go to a complying fund (most employees can choose their own fund)
- If you do not pay on time you may have to pay the Super Guarantee Charge (SGC)
When to pay superannuation
You must make the payments at least four times a year, by the quarterly due dates
- 1 July – 30 September. Payment due date 28th October
- 1 October – 31 December Payment due date 28th January
- 1 January – 31 March Payment due date 28th April
- 1 April – 30 June Payment due date 28th July
When a due date falls on a weekend or public holiday, you can make the payment on the next working day.
You can make payments more regularly if you want to as long as your total superannuation guarantee obligation for the quarter is paid by the due date. We recommend paying your obligations monthly.
If you use a clearing house, the employee’s super contribution is counted as being paid on the date the super fund receives it, not the date the clearing house receives it from you. (The exception is the Small Business Superannuation Clearing House service). Check with your clearing house to make sure you allow enough time for your payments to be processed before the quarterly due dates.
If you haven’t paid on time you shall need to lodge a superannuation guarantee charge statement and pay the SGC. If you pay late, you may be able to use the late payment either to offset the SGC or to carry forward as prepayment of a future contribution for the same employee.
What is the super guarantee charge (SGC)?
The SGC is not tax-deductible and is made up of
- Superannuation shortfall amounts on your employee’s salary or wages
- Interest on those amounts (currently 10%), calculated from the start of the quarter that superannuation guarantee wasn’t paid
- An administration fee of $20 per employee, per quarter
In addition to the SGC, employers are liable for penalties of up to 200% of the SGC amount, imposed at the Commissioner’s discretion. All payments including both the SGC and any penalties are non-deductible for income tax purposes.
Partial Amnesty
The Federal Government has reintroduced legislation to introduce a one-off amnesty. Under the terms of the amnesty, employers who voluntarily disclose will be able to claim tax deductions, will not be charged the administration fee and will not be subject to any further penalties. This amnesty only applies to shortfalls for quarters up to and including the quarter ended 31 March 2018. Any shortfalls emanating from periods after March 2018 quarter will be subject to the full SGC, including the administration fee, and will remain non-deductible. Once the amnesty period is over, the penalties for non-compliance will be a minimum of 100% of the SGC for any quarter covered by the amnesty, with no power for the Commissioner to remit them below that amount unless there are ‘exceptional circumstances’. The amnesty concessions will not apply if an employer is targeted for a superannuation guarantee review or audit during the amnesty period.
Example
Facts
- Employer with 10 employees has a super liability for the March 2015 quarter of $9,500 (based on ordinary times earning of $100,000). The total salary and wages (including overtime and allowances) paid to employees for the quarter was $110,000. The employer pays the super guarantee of $9,500 in full on 29 April 2015 (just one day late). Employer is audited three years later and submits the SGC forms on 5 May 2018.
Calculation
- Shortfall amount of $10,450 (being total salary wages of $110,000 x 9.5%)
- Interest of approx. $3,487
- Admin fee of $200
Total amount of $14,137. Employer can elect the late payment offset to offset the amount paid late against the SGC. i.e. $14,137 less $9,500 = $4,637.
The SGC payable is significant considering the actual amount of superannuation guarantee contributions of $9,500 was only paid one day late.
In addition, penalties of up to 200% of the Superannuation Guarantee Charge may be imposed.
Conclusion
With the amnesty period underway for quarters up until March 2018 we encourage all employers to review their past superannuation payments and confirm that contributions have been made in accordance with superannuation guarantee requirements. For quarters commencing 1 April 2018 onwards we reiterate the ATO’s enhanced data analytics tools and the significantly increased data available to the ATO with the introduction of single touch payroll. We are already seeing increased compliance activity from the ATO on this issue.
The importance of paying your superannuation obligations in full and in a timely manner cannot be understated.
Please contact our office if you would like further information.
Mandatory Code of Conduct
Monday 20th April 2020
As you may be aware, on 8 April 2020 the National Cabinet issued a Mandatory Code of Conduct (The Code) with respect to commercial and retail leases (for your reference a copy of the Code can be located here).
Points to be noted from the code include:-
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The Code outlines the way in which commercial and retail leases ought to be dealt with for the COVID-19 period (initially 30 March – 27 September 2020) with a reasonable recovery period to follow.
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The Code requires the parties to a lease to carry out ‘good faith’ discussions as to lease arrangements during this time.
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The Code applies to all leases where:- • The Tenant is suffering financial stress or hardship as a result of COVID-19. • The Tennant is eligible for the Government JobKeeper program. • The Tennant has an annual turnover of less than $50 million.
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The Code sets out fourteen principles to be applied on a case by case basis.
These include:-
• The Landlord must not terminate leases for non-payment of rent during the COVID-19 period or during a reasonable subsequent recovery period.
• Tenants must remain committed to the terms of the lease – material failure to abide by substantive terms of the lease will forfeit protections provided under this Code.
• Rent reductions are to be offered proportionate to the tenants reduction in turnover.
• Rent reductions are to be in the form of ‘waivers’ or ‘deferrals’.
• ‘Waivers’ must be for no less than 50% of the reduction in rent
• ‘Deferrals’ must be amortized over the greater of the balance of the lease term and twenty four months.
• Landlords must not draw on a tenant’s security deposit or bond for the non-payment of rent during the COVID-19 period.
• Tenants should be able to extend the lease for a period equivalent to the period of the rent waiver and/or deferral period.
• Landlords agree to a freeze on rent increases (other than for leases based on turnover) for the duration of the COVID-19 period and a reasonable subsequent recovery period. - Should you require any further information please contact our office.
Victorian Government Business Support Fund
Wednesday 1st April, 2020
The Victorian Government has launched a Business Support Fund designed to help small business survive the impact of the COVID-19 virus. Basically the fund provides a grant of $10,000 which can be used to meet any business expense.
To be eligible a business must:-
- Employ staff (or have employed staff in 2019-2020).
- Have annual turnover greater than $75,000.
- Have annual payroll (including superannuation) less than $650,000.
- Have closed due to (or impacted by) Victoria’s shutdown restrictions.
Should you require further information, advice or assistance applying for the grant, please contact our office on 5304 8200 or email This email address is being protected from spambots. You need JavaScript enabled to view it. and one of our advisors will contact you.
Alternatively you can click here to access the website.
Coronavirus Stimulation Package 3
Tuesday 31st March, 2020
The Federal Government has announced a further measure to assist businesses dealing with the impact of the COVID-19 crisis.
Under the measure, known as the ‘Job Keeper Payment’ the government will reimburse qualifying businesses $1500 per fortnight per eligible employee.
What businesses are eligible?
- All businesses – companies, trusts, partnerships, sole traders, not-for-profit organisations which
- Have a turnover of less than $1 billion* and
- Have suffered reduced turnover of 30% relative to a comparable period of a year ago (for at least one month)
*other tests apply for businesses with turnover greater than $1 billion
Which employees are eligible?
- Employees who are over 16 years of age and were employed by the employer as at 1 March 2020
- Employees who are currently employed by the employer including those who have been stood down or had their hours reduced
- Full-time or part-time employees and long-term casuals (being casuals who have been employed by the employer for longer than 12 months at 1 March 2020)
- Some VISA Holders (contact our office with specific queries)
How do you apply?
- The program will be managed through the Australian Taxation Office, and initial registrations can be made here, or we can attend to the registration on your behalf – please advise if you wish us to do so
- The ATO will require further information after registration to complete the application prior to the first reimbursement being made to the business
How does the Job Keeper payment apply?
The purpose of the payment is to ensure that eligible employees receive a minimum payment of $1500 per fortnight before tax.
Employers are required to withhold PAYG from the gross payment.
Some examples are:
1. An employee has not been stood down and ordinarily receives more than $1500 p.f.
- The employee continues to receive their regular income.
- The Job Keeper payment effectively subsidises the employee’s income.
- The employer is liable for SGC on the full amount of the regular income.
2. An employee has not been stood down and ordinarily receives less than $1500 p.f.
- The employer must pay the employee a minimum amount of $1500 p.f. (before tax).
- The employer receives a $1500 p.f. subsidy.
- The employer is only liable for SGC on the amount of the regular income.
3. An employee has been stood down
- The employer must pay the employee a minimum amount of $1500 p.f. (before tax).
- The employer receives a $1500 p.f. subsidy.
- The employer is not liable for SGC on the payment.
Other matters to be aware of
- The program will create cash flow issues for employers – reimbursements are made directly to the employer in arrears and businesses will need to fund at least one month of payments to employees.
- Employees cannot receive the payment from more than one employer – employers will need to confirm with employees that they are claiming the Job Keeper payment on their behalf.
- It is unclear how other ‘on-costs’ (payroll tax from 1 July 2020, WorkCover) will apply
Sole Traders
- May be eligible to receive the payment of $1500 p.f. if their turnover has reduced by 30%
- It is unclear if this applies to individual members of a partnership
Should you have any queries about your specific circumstances, please contact our office on:- 5304 8200 or This email address is being protected from spambots. You need JavaScript enabled to view it. and we will have one of our people contact you to discuss.
Coronavirus Stimulation Package
Monday 23rd March, 2020
As you will be aware both the Federal and State Governments announced packages at the weekend designed to assist small businesses cope with the current COVID-19 crisis. Basically the measures fall into six areas:-
1. PAYG Relief (NB this replaces the 12 March 2020 announcement)
- Eligible employers will receive up to $100,000.00 as a non-taxable grant
- The grant will be split over two financial periods: A maximum amount of $50,000.00 in the period 01/03/2020 to 30/06/2020 and a matching payment in the period 01/07/2020 to 30/09/2020
- The grant will be credited upon lodgement of the relevant activity statement
- If the grant results in a credit on the activity statement, a refund will be issued.
- Alternatively the grant will reduce the net amount payable on the activity statement.
- If the business is registered as an employer and pays wages but did not withhold PAYG during the period of the relevant activity statement a minimum grant of $10,000.00 will be applied.
- Eligibility o Turnover <$50million p.a. o Registered as an employer prior to 12 March 2020. o The entity must continue to be active.
2. PAYROLL TAX (PRT)
- PRT will be waived for the entire financial year (01/07/2019 to 30/06/2020) for those business with a payroll <$3 million.
- Refunds of PRT already paid this financial year will commence to issue in early April.
- Lodgment of PRT Returns will still be required.
3. LIQUOR LICENCE FEES
- Eligible businesses that that have paid a fee for 2020 will have the payment reimbursed.
- Businesses which have not paid the annual fee as yet will have the fee waived.
4. SOCIAL SECURITY
Coronavirus supplement
A new, time-limited Coronavirus supplement to be paid at a rate of $550.00 per fortnight. This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
- The supplement will be paid for 6 months. • Total fortnightly benefit will increase to $1,100.00 (maximum).
- Asset Test will be waived (income Test still applies).
- Waiting period (Normally 1 week) will be waived.
- Accessible by permanent employees who have been stood down, casual workers, contract workers, self-employed and sole traders.
People will not be permitted, and will need to declare that they are not, accessing employer entitlements (such as annual leave and/or sick leave) or Income Protection Insurance, at the same time as receiving these payments.
Payments to support households
In addition to the $750 stimulus payment announced on 12 March 2020, a further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement.
Deeming rates
Centrelink income test deeming rate reduced by 0.25 percentage points. As of 1 May 2020, the lower deeming rate will be 0.25% and the upper deeming rate will be 2.25%.
5. SUPERANNUATION
- Employees who have been stood down, made redundant or who have had their working hours reduced by 20% since 1 January, together with sole traders who have had their businesses suspended or have suffered a reduction in turnover of at least 20% will be able to apply for access to up to $10,000.00 of their superannuation.
- Post 1 July 2020, a further $10,000.00 can be applied for.
- These withdrawals will not be taxable.
- Eligible individuals can apply directly to the ATO via the myGov website and they will need to certify that they meet the eligibility criteria.
- Minimum pension rates have been reduced by 50% e.g. for those in the 65-74 age group the pension rate will reduce from 5% to 2.5%.
6. BANKING & FINANCE
The Australian Banking Association (ABA) has announced a package for business which:-
- Are effected by COVID-19 (basically everyone)
- Have total debt to all credit providers of less than $3 million
The relief provides:-
- Deferral of interest and principal repayments for a period of six months.
- Capitalising the deferred interest and then either:
(1) Extending the period of the loan, meaning the regular repayment remains; or
(2) Increasing the amount of the repayment and the term of the loan remaining the same.
In addition the Federal Government is providing a SME Guarantee Scheme
Details of the scheme are:-
- Available to businesses with turnover <$50 million
- Maximum loan of $250,000.00
- Loan must be for working capital
- Loan will be for a maximum period of three years
- No repayments in the first six months
- The government will provide a guarantee for 50% of the loan
- The loan will be unsecured
- Will commence early April and be available until 30 September
- Normal credit approval process will apply
