Employer obligations are coming under the microscope more and more as sophisticated systems, coupled with additional reporting requirements is making it easier for government bodies to review and match business information.
This is not an attempt to scare monger, rather an opportunity to review our current position as employers to ensure ‘the house is in order’.
Below we touch on three common employer responsibilities, that fall outside of the ‘normal’ wages and superannuation guarantee charge paid to employees; which are:
2. Fringe Benefits Tax
3. Payroll Tax
Workcover is a mandatory accident insurance policy covering your employees.
WorkCover gives you peace of mind knowing you’re insured against all statutory and damages claim costs in the event of a work-related injury to your workers. There are no limits or caps to the number of claims that can be made against your policy.
Employers are responsible for renewing the policy by accurately declaring wages and paying the premium within the renewal period each year; including updating Workcover if:
your primary business activity changes—this may affect your premium rate
your contact details change
you wish to authorise anyone from your business to act on your behalf.
Penalties can apply if the appropriate Workcover policy is not in place, if you are uninsured (because you have not taken out insurance or have not paid your premium by the due date) or if you are under-insured (because you have not accurately declared your wages).
More information on Queensland Workcover requirements can be found here.
2. Fringe Benefits Tax
Fringe Benefits Tax (FBT) is a tax payable to the ATO by employers for benefits paid to an employee (or an employee’s associate e.g. a family member) in place of salary or wages. This is separate to income tax and is calculated on the taxable value of the fringe benefits provided.
For example, an employee may receive fringe benefits in the form of:
low interest loans
payment of private expenses.
It’s entirely legal and a common form of remuneration packaging used by businesses for their employees.
One of the more common fringe benefits we see relate to the private use of business owned motor vehicles; often employees will contribute after tax earnings towards their personal use to negate FBT payable by the employer.
Some benefits are exempt from fringe benefits tax or receive concessional treatment (for example, laptops used predominately for work purposes). In addition, there are specific exemptions and concessions that apply to some non-profit organisations and health based organisations.
FBT paid is a deductible cost to the employer.
3. Payroll Tax
Payroll tax is a self-assessed, general purpose state and territory tax assessed on wages paid or payable by an employer to its employees, when the total wage bill of an employer (or group of employers) exceeds a threshold amount.
The payroll tax rates and thresholds vary between states and territories; the current Queensland and New South Wales annual threshold is $1,100,000 and $750,000 respectively.
Taxable wages include gross wages, superannuation, director fees, commissions, allowances, fringe benefits; and extends to include contractors in some instances.
Be aware that grouping provisions can also apply where there is common directorship and/or ownership, which will group the relevant entities’ taxable wages, before applying the threshold.
Payroll Tax Returns are lodged and payment of liability made, at an agreed frequency (monthly, quarterly, or annually) to the respective revenue office in the Australian state and/or territory in which the wage payment is deemed liable.
Whilst payroll tax is often seen by business owners and shareholders, as a penalty for growing an enterprise, employing more people and ultimately contributing to the economy….. the silver lining is payroll tax is a deductible expense to the employer.
Employer obligations are generally ‘case by case’; please contact us if you would like to know more about where you stand as an employer.