From July 2022, the $450-per-month super guarantee (SG) eligibility threshold was removed.
This means that if an employee meets the other SG eligibility requirements, you must pay them SG, regardless of how much they earn. However, employees under 18 must still work more than 30 hours in a week to be eligible.
It’s important to make sure your payroll and accounting systems have been updated for salary and wages paid from 1 July 2022. This will ensure you correctly calculate your employee’s SG entitlement.
An employee’s eligibility for SG is determined when they are paid, not when they earn the income.
This means if you pay an eligible employee on or after 1 July 2022, you need to pay their super regardless of how much they have earned – even if all or part of the relevant pay period is before 1 July.
The ATO’s Superannuation guarantee eligibility decision tool can help you determine if your employees, including any contractors treated as employees for super purposes, are eligible for super.
You can also check out the Super guarantee contributions calculator to help you work out how much super you need to pay.
Single Touch Payroll (STP) Phase 2 means every business that employs staff will be required to get on board with the expanded program.
STP Phase 2 requires additional information to be reported to the ATO, enabling other government agencies to leverage the STP infrastructure to receive information and support the administration of the social security system.
With STP Phase 2 reporting live from 1 January 2022, there’s expanded capturing and sharing of payroll and employee data as compared to the original rollout of Phase 1.
This extended capturing by the ATO is shared more widely with relevant government bodies – such as social services – and fills certain gaps in payroll information sharing that wasn’t previously being transmitted. This new data remit remains an automated process, handled through STP-compliant payroll software such as cloud accounting apps and payroll systems.
What the new is data being shared?
The ATO is looking to patch knowledge gaps in the payroll submission process to support social security purposes and get a better understanding of employee payment details.
So, in addition to the payroll and employee information you’re already sharing through STP Phase 1 (salaries, PAYG, superannuation), Phase 2 involves capturing the following pay items, employee records and new fields:
employment basis
paid leave
allowances
overtime
cessation details and termination reasons
child support deductions
salary sacrifice
lump sum payments
country codes
Under STP phase 2 reporting employers are also required to separately itemise the components which make up the gross earnings amount by reporting all allowances separately, not just expense allowances that may have been deductible on an employee’s individual income tax return.
Digital Service Providers (DSPs)
STP Phase 2 requires employers to fill out employees’ payroll data correctly in your chosen software solution. Be sure to use a DSP that can roll out compliance updates to their software.
Updates to STP will be made by DSPs on users’ behalf and they are working with the ATO to ensure timely and competent compliance and delivery. Employers are already filling out this payroll information, so there are no new fields to capture on your end. In this sense and the automated nature of STP, employers are not required to do anything further than what is already being done under Phase 1.
What it will do is decrease the compliance burden upon businesses in terms of reporting. For example, under Phase 2 employers are no longer required to submit TFN declaration forms.
What will not be changing
The rollout of STP Phase 2 following does not change:
the way Single Touch Payroll is reported
Single Touch Payroll reporting dates (on or before payday)
the types of employee payments required for Single Touch Payroll reporting
employers’ current tax and super obligations
end of year finalisation requirements and submission responsibilities
The next stage of the Single Touch Payroll (STP) journey is underway
STP Phase 2 will see businesses build on their existing payroll reporting to share more information each pay run.
Most employers are now reporting through STP. You will need to start reporting if you have not yet transitioned, unless you have an exemption or a deferral.
What do business owners need to do?
If you’re currently STP compliant with payroll software that’s enabled, you should be running your payroll as usual. If you’re a Xero or MYOB user, your DSP will confirm when your solution is ready for STP Phase 2 reporting.
If you have any queries or concerns over your payroll solution or if you need reassurance, please consult your Allan Hall bookkeeper or accountant.
How can tradespeople go about streamlining their business and help set themselves up for success?
Reduce admin with the right tech
For trade business owners wanting to get more control and grow their business, reducing time spent on admin can have a huge impact.
Worldwide, 39% of tradespeople spend more than 12 hours per week on paperwork – that’s more than one working week every month. Using specialised trade business management software can drastically reduce this.
For example, one area that’s a time blackhole for tradespeople is quoting. A fast and efficient quoting system not only saves admin time, but can also have a positive impact on how many jobs a tradesperson is likely to win.
Managing staff and communicating with customers is another area where the right software can come to the rescue for tradespeople. It’s easy to see how this time can add up if operators are spending a lot of the time on the phone, booking jobs, giving customers updates and liaising with staff.
Whereas using a cloud-based job management app like Tradify can ensure that your staff know exactly what they need, where to go and what to do just by checking the app. The Tradify app also features live job-tracking which can help communicate to each customer exactly what’s happening.
Using software to set up efficient admin processes builds a solid foundation for a trades business.
The amount of time saved compounds over time, potentially saving hundreds of hours a year. And the flow-on effects can be huge. Not only does it mean time saved, it can also help tradespeople feel less stressed, more in control and give them time back to spend on higher value activities, helping their trade business grow as a result.
We know that better efficiency gets you more family time and the ability to take the time off you want to have!
Got a question about making the most of technology in your trade business? Get in touch with our Bookkeeping team who will be able to assist you with all your cloud bookkeeping queries on 02 9981 2300.
Allan Hall Business Advisers are Platinum Xero Partners.
To give you fast, easy and secure access to your Xero account using MFA, Xero has created their own authenticator app called Xero Verify.
It’s built using the highest security standards to give you confidence that your account access is in safe hands.
Xero Verify is now available free of charge in the Apple and Google app stores. It only takes a few minutes to set up and sends a push notification to your phone when you log in, so you can just tap and go.
How we’ll help you prepare for MFA
While we encourage you to download Xero Verify and opt-in to MFA when it’s available, Xero will give plenty of notice before it becomes mandatory. As always, our team is here to support you, to make it as easy as possible for you to stay safe and secure.
Got a question on Multi-Factor Authentication on your Xero business account? Get in touch with our Bookkeeping team 02 9981 2300 for cloud bookkeeping assistance.
Allan Hall Business Advisers are Platinum Xero Partners.
