Tag: payroll

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Single Touch Payroll Phase 2

Posted on | by Allan Hall

What every small business needs to know

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.

Single Touch Payroll Phase 2 in a nutshell

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.

CONTACT ALLAN HALL

Related reading

Expansion of STP (Phase 2)
payroll

Expansion of STP (Phase 2)

Posted on | by Allan Hall

Single Touch Payroll (STP) is part of the government’s commitment to streamlining employer reporting obligations

Most employers are now reporting through STP. You will need to start reporting if you have not transitioned yet unless you have an exemption or a deferral.

In the 2019–20 Budget, the government announced that STP would be expanded to include additional information.

Including this additional information will:

  • reduce the reporting burden for employers who need to report information about their employees to more than one government agency
  • support the administration of the social security system.

The mandatory start date for STP Phase 2 reporting was 1 January 2022 however the ATO is working with Digital Service Providers (DSPs) that are updating their solutions to support Phase 2 reporting. Your DSP will confirm when your solution is ready:

  • Xero users have until 31 December 2022 to start reporting the additional information required for ATO STP Phase 2 (See STP Phase 2: Steps for a successful transition)
  • MYOB has obtained a deferral from the ATO which means users have until 1 January 2023 to move to STP Phase 2.

Some DSPs, despite their best efforts, will need more time to get ready and transition their customers. They will advise you if the ATO has approved a deferral for users to start reporting later than the mandatory start date.

If you can transition to STP Phase 2 reporting when your solution is ready, then you do not need to ask the ATO for more time.

If you need more time in addition to your DSP’s deferral, you must apply. See STP expansion (Phase 2) delayed transitions.

CONTACT ALLAN HALL

Related reading — what small businesses need to know about STP Phase 2

Single Touch Payroll Phase 2
payroll

National Minimum Wage Rise

Posted on | by Allan Hall

The Fair Work Commission has announced two substantial increases to minimum wages

National Minimum Wage Increase 

The National Minimum Wage will increase by 5.2%, amounting to $40 a week. 

The new minimum wage will be $812.60 per week or $21.38 per hour.  

Award minimum wage increase 

The increase to award minimum wages is 4.6%. This is subject to a minimum increase for award classifications of $40 per week and based on a 38-hour week for full-time employees.  

This means the minimum award wages: 

  • Above $869.60 per week, will get a 4.6% increase 
  • Below $869.60 per week, will get a $40 increase 

When do these changes come into effect? 

National Minimum Wage 

The new National Minimum Wage will apply from the first full pay period on or after 1 July 2022.  

Awards 

For most award-covered employees, minimum wages will increase from the first full pay period on or after 1 July 2022. 

However, for employees covered under the awards listed below the increase will be effective from 1 October 2022: 

Aviation
  • Aircraft Cabin Crew Award 
  • Airline Operations – Ground Staff Award 
  • Air Pilots Award 
  • Airport Employees Award 
  • Air Services Australia Enterprise Award 2016 
Hospitality 
  • Hospitality Industry (General) Award 
  • Registered and Licensed Clubs Award 
  • Restaurant Industry Award 
Tourism 
  • Marine Tourism and Charter Vessels Award 
  • Alpine Resorts Award 

Which employees will receive this increase?  

Employees whose minimum wage entitlements are set by:    

  • The national minimum wage    
  • A modern award     
  • A registered agreement (in some circumstances)    

Non-award covered employees 

It is important to note that if you have non-award covered employees on a salary which is above the national minimum wage, you are not obliged to increase their salary. However, with the current job market being so competitive and a shortage of potential employees available in the Australian market, it may be worth undertaking salary benchmarking and considering an increase when undertaking your next salary review process.    

Next steps

  1. Check whether your employees are covered by the national minimum wage, or a modern award.   
  1. Should a modern award apply to your employees, ensure you have correctly classified employees under the relevant award, and confirm the minimum rates of pay that will apply.    
  1. Review the current rates of pay for your employees and, if required, adjust their pay rates from their first full pay period starting on or after the appropriate date as it applies to your modern award.  

Changes to Superannuation from 1 July 2022 

It is important to also note that the increase in the super guarantee rate from 10% to 10.5% will be effective from 1 July 2022. Read more about the changes to superannuation here. 

Contact us

Our experienced HR Consultants at Allan Hall HR are available to answer your queries regarding the wage rise and assist you with salary benchmarking, clarification of awards or any other employee-related matters. Please get in touch with us today on 1300 675 393 or at [email protected] .

family domestic violence

Family Domestic Violence leave entitlements

Posted on | by Allan Hall

Provisional decision by the Fair Work Commission to implement 10 days of paid family and domestic violence leave

Key points

  • It is anticipated that full-time and part-time award covered employees will soon be eligible to access 10 days of paid family and domestic violence leave per year.
  • The date this entitlement will come into effect has not yet been finalised.
  • All employees, including casuals, can continue to access five days of unpaid FDV leave per year in the meantime, under the National Employment Standards.

The Fair Work Commission has issued a provisional decision to provide 2.3 million full-time and part-time employees covered by modern awards with an entitlement to 10 days of paid family and domestic violence leave annually.

Under the current National Employment Standards, all workers (including casuals) are entitled to access five days of unpaid family and domestic violence leave per year.

However, on 17 May 2022 a provisional decision was made by the Fair Work Commission to provide full-time and part-time employees covered by a modern award with access to 10 days of paid family and domestic violence leave each year. The leave will accrue annually but will not exceed 10 days.

Please note, this decision is not yet finalised and the Commission has asked for input from interested parties before issuing a final decision.

Who is eligible to apply for family and domestic violence leave?

An employee who is a victim of family and domestic violence may access this leave to respond to the impact of family and domestic violence, where it is impractical to do so outside of regular working hours.

Reasons an employee may take family and domestic violence leave include:

  • to attend police interviews or court hearings
  • to plan for their safety or the safety of a close family member
  • to attend appointments with counselling, medical or legal providers

Applying payment to family and domestic violence leave will help individuals to:

  • sustain their economic security
  • access appropriate services
  • safely remove themselves from a life of violence.

Employer Concerns

There have been some concerns raised by business groups about the increased costs associated with the new paid entitlement. However, the Fair Work Commission anticipates that the take-up of the paid family and domestic violence leave entitlement would likely be low. In addition, the current estimated spend associated with family and domestic violence leave due to increased absenteeism and lost productivity sits at $2 billion annually, which is far costlier for businesses.

Effective Date

There is no set effective date as the decision isn’t yet finalised. Given that there have been some concerns raised by business groups, the Fair Work Commission will liaise with relevant parties, giving them the opportunity to raise any objections, before the details are finalised and entitlements come into effect.

Casual Employees

At this stage, the Fair Work Commission has advised that casual employees have been excluded from the new paid family and domestic violence leave entitlement.

Casual employees will continue to be eligible to access up to five days of unpaid family and domestic violence leave each year under the National Employment Standards.

Action for employers

Although the decision is not yet finalised, it is important for employers to prepare by:

  • keeping an eye out for developments in this area over the coming months. Once the decision is finalised, you may need to speak with your bookkeeper or payroll provider to ensure you have a family and domestic violence leave category available in your payroll software.
  • reviewing or developing a workplace policy which provides guidance for employees experiencing family and domestic violence, in respect to accessing leave or additional support.

If you would like further guidance or assistance with reviewing or developing policies and procedures regarding family and domestic violence leave, or approaching difficult employee conversations, please do not hesitate to contact the team at Allan Hall HR.

Looking Ahead

Some unions and business advocates are calling on the federal government to apply 10 days of paid family and domestic violence leave to all employees covered by the National Employment Standards (including casuals and contractors). They are advocating for family and domestic violence leave to be inserted into the National Action Plan to end violence to women and children. Given this activity, we will likely see more announcements coming soon in respect to these leave entitlements.

Contact us

Our experienced HR Consultants are available to support you with any employee-related questions. Please get in touch with us today on 1300 675 393 or at [email protected].

payroll

Single Touch Payroll changes

Posted on | by Allan Hall

There have been changes to Single Touch Payroll (STP)

Employers are required to report additional payroll information now or once your payroll product is ready.

You need to start reporting additional information on or before each payday — this is known as STP Phase 2.

STP Phase 2 started on 1 January 2022

Some Digital Service Providers (DSPs) need more time to update their payroll software products and transition users. If your DSP has a deferral, this covers you.

It’s important you understand which of the following circumstances apply to you:

  • Your payroll product is ready — it’s time for you to start STP Phase 2 reporting now or have a plan in place to transition as soon as possible
  • You are covered by a DSP deferral — know when your product will be ready and that you are ready to start Phase 2 reporting when it has been updated, or no later than the first payday after your DSP deferral expires:
    • MYOB 01/01/2023 — however MYOB does have this updated in their program for people to start to update
    • Xero 31/12/2022
    • Reckon Products 01/01/2023     
  • Your payroll product is not being updated to offer STP Phase 2 reporting — your DSP will let you know if they have another product you can use. If not, you’ll need to choose a product that offers STP Phase 2 reporting.

If you’re unsure as to which of these circumstances applies to you, speak with your provider or your tax and BAS professional.

What you need to do

Many DSPs are releasing changes progressively. Your DSP will provide you with instructions so it’s important to follow them.

The ATO has compiled some resources to help business owners to understand the changes and prepare. These include a factsheet, checklist and detailed reporting guidelines which outline the STP Phase 2 reporting requirements. These can be accessed at ato.gov.au/STPresources.

The additional STP information is intended to help Services Australia customers, who may be your employees, get the right payment. It will also reduce the need for you to provide information about your employees to multiple government agencies.

Need extra time to transition?

You can apply for a delayed transition if you need more time to start STP Phase 2 reporting. Visit ato.gov.au/delayedstp2transitions to find out how to apply.

CONTACT ALLAN HALL

July

July changes for super guarantee

Posted on | by Allan Hall

Get ready for changes to super guarantee

From 1 July 2022, two important super guarantee (SG) changes will apply to your business. These are:

  • the rate of SG is increasing from 10% to 10.5%
  • the $450 per month eligibility threshold for when SG is paid is being removed.

3 things you need to do

  1. Check that your software is updated to correctly calculate your employees’ SG entitlement from 1 July 2022.
  2. If the removal of the $450 threshold means you’ll be paying SG for one or more employees for the first time, you’ll need to give them a Standard Choice Form.
  3. If your employee does not provide you with a choice of super fund, review the Stapled Super Fund information on our website for guidance on what you need to do next.  A stapled super fund is an existing super account linked to an individual employee.

What this means for you

These changes mean that from 1 July 2022:

  • you’ll need to make SG contributions at the new rate of 10.5%
  • employees can be eligible for SG, regardless of how much they earn. You may have to pay SG for the first time for some or all of your employees.

The ATO is working with digital service providers (DSPs) to make sure payroll software is updated in time. Their updated online tools and calculators will be available to help from 1 July 2022.

If you use a tax agent, we are also aware of these changes and able to assist you.

CONTACT ALLAN HALL

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stopwatch countdown to deadline

Super to cover more employees

Posted on | by Allan Hall

Removing the $450 per month threshold for super guarantee eligibility

The Australian Government announced it will remove the $450 per month threshold to expand coverage of super guarantee to eligible employees regardless of their monthly pay.

The change is now law by the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 with royal assent on 22 February 2022.

From 1 July 2022, employers will be required to make super guarantee contributions to their eligible employee’s super fund regardless of how much the employee is paid.

Employees must still satisfy other super guarantee eligibility requirements.

The ATO will work with digital service providers to assist them in updating their payroll and accounting software to be ready for this change.

Employers will need to check that their payroll and accounting systems have been updated for super payments made after 1 July 2022 to ensure they correctly calculate their employee’s super guarantee entitlement.

The change will expand the coverage of SG to eligible employees regardless of their monthly pay.

CONTACT ALLAN HALL

Parliament House

Federal Budget 2022-2023

Posted on | by Allan Hall

Tax and Superannuation Overview

The Federal Treasurer, Mr Josh Frydenberg, handed down the 2022–23 Federal Budget at 7:30pm (AEDT) on 29 March 2022.

In an economy emerging from the pandemic, the Treasurer has confirmed an unemployment rate of 4% and an expected budget deficit of $78 billion for 2022–23.

As international uncertainties add pressure to the cost of living, key measures provide cost of living relief in the form of an increased Low and Middle Income Tax Offset, a one-off $250 payment for welfare recipients and pensioners and a 6-month fuel excise relief.

Other measures seek to promote innovation, with expanded “patent box” tax concessions proposed, and provide tax incentives for small business to invest in the skills of their employees. A lower GDP uplift rate for PAYG and GST instalments has also been proposed to support cash flows of small and medium businesses.

To read our comprehensive Budget report outlining the changes to taxation and accounting, please click below:

2022-2023 BUDGET REPORT

The highlights are set out below:

Business

  • Additional state and territory COVID-19 business support grant programs will be eligible for tax treatment as non-assessable non-exempt income until 30 June 2022.
  • Small and medium businesses will be able to deduct an additional 20% of expenditure incurred on external training courses provided to their employees.
  • Small and medium businesses will be able to deduct an additional 20% of eligible expenditure supporting digital adoption.
  • The Boosting Apprenticeship Commencements wage subsidy will be extended by 3 months.
  • Concessional tax treatment will apply from 1 July 2022 for primary producers selling Australian Carbon Credit Units and biodiversity certificates.
  • Access to employee share schemes in unlisted companies will be expanded.
  • The PAYG instalment system is set for a structural overhaul with a set GDP uplift of 2% to apply for the 2022–23 income year.
  • Additional funding will be provided to further reform insolvency arrangements, including the insolvent trading “safe harbour”.
  • Business registry fees will be streamlined over 3 years from 2023–24.
  • Wholly owned Australian incorporated subsidiaries of the Future Fund Board of Guardians will be exempt from corporate income tax.

Increased deduction for small business external training expenditure

Small and medium businesses will be able to deduct an additional 20% of expenditure incurred on external training courses provided to their employees.

The additional deduction will apply for businesses with aggregated turnover of less than $50 million. The external training course must be delivered by an Australian entity and provided to employees in Australia or online. In-house or on-the-job training and expenditure for persons other than employees will be excluded.

The measure will apply for eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2024. Where eligible expenditure is incurred before 1 July 2022, the additional deduction will be claimed in the tax return for the following income year.

Increased deductions for digital adoption by small businesses

Small and medium businesses will be able to deduct an additional 20% of eligible expenditure supporting digital adoption.

The additional deduction will apply for businesses with aggregated turnover of less than $50 million. Eligible expenditure will include the cost of depreciating assets and business expenses supporting digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services. An annual cap of $100,000 will apply to expenditure eligible for the additional deduction.

The measure will apply for eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2023. Where eligible expenditure is incurred before 1 July 2022, the additional deduction will be claimed in the tax return for the following income year.

Apprenticeship wage subsidy extended

The Boosting Apprenticeship Commencements wage subsidy will be extended to support businesses and Group Training Organisations that take on new apprentices and trainees. The subsidy will now be available to 30 June 2022. This measure will provide for an additional 35,000 apprentices and trainees. Eligible businesses will be reimbursed up to 50% of an apprentice or trainee’s wages of up to $7,000 per quarter for 12 months.

Individuals

  • The low and middle income tax offset will be increased by $420 in the 2021–22 income year to ease the current cost of living pressures.
  • A one-off payment of $250 will be made to individuals who are currently in receipt of Australian government social security payments, including pensions, to ease cost of living pressures.
  • Additional funding will be provided over 5 years to support older Australians in the aged care sector with managing the impacts of the pandemic.
  • Costs of taking a COVID-19 test to attend a place of work will be tax deductible for individuals and exempt from fringe benefits tax from 1 July 2021.
  • A single Paid Parental Leave scheme of up to 20 weeks paid leave will replace the existing system of 2 separate payments.
  • CPI indexed Medicare levy low-income threshold amounts for singles, families, and seniors and pensioners for the 2021–22 year announced.
  • The number of guarantees under the Home Guarantee Scheme will be increased to 50,000 per year to assist homebuyers with lower deposits.

Superannuation

The 50% reduction of the superannuation minimum drawdown requirements for account-based pensions will be extended for an additional year.

Need help?

If you would like assistance to interpret these changes and how they may affect your individual circumstances or your business, please contact your Allan Hall Advisor on 02 9981 2300.

The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au.

CONTACT ALLAN HALL

flooded street intersection

Relief for flood-affected communities

Posted on | by Allan Hall

Help for businesses affected by storms and floods

Financial support

We outline both state and federal financial recovery assistance for people impacted or affected by the recent NSW floods.

Please liaise with the relevant agencies directly and contact us if you require support in making an application for funding.

Small business and not-for-profit organisations

  • Disaster recovery grant – up to $50,000 to help pay for the cost of clean-up and resuming operations
  • Disaster recovery allowance – a short-term income support payment to assist if you’ve lost income as a direct result of the floods, provided by the Australian Government
  • Stamp duty relief – for replacing insured commercial motor vehicles written off due to floods and storms
  • Disaster relief loans – concessional interest rate loans up to $130,000 for small businesses and up to $25,000 for not-for-profit organisations.

Primary producers

  • Special disaster grant – up to $75,000 to help pay for the cost of clean-up and resuming operations
  • Disaster recovery allowance – a short-term income support payment to assist if you’ve lost income as a direct result of the floods, provided by the Australian Government
  • Stamp duty relief – for replacing insured commercial motor vehicles written off due to floods and storms
  • Natural disaster transport subsidy – up to $15,000 to cover costs of transporting fodder/water to an affected property, stock to sale or slaughter and stock to/from agistment
  • Disaster relief loans – concessional interest rate loans up to $130,000 for business continuity and to replace or repair damage not covered by insurance
  • Flood-affected farmers and land managers who require assistance with livestock assessment, veterinary assistance, emergency fodder and livestock euthanasia or burial, can call 1800 814 647.

Sport and recreation clubs

  • Disaster relief grant – up to $2,000 to assist with clean-up and restoring essential facilities and equipment
  • Disaster relief loans – concessional interest rate loans up to $10,000 to help meet the costs of restoring essential club facilities, equipment or other assets

Clean-up support

Flood-impacted businesses will receive clean-up assistance, including the removal of debris, mud and green waste.
 
Skip bins and dump trucks have started to appear on the streets. Where there are no skip bins or dump trucks available, separate waste on the kerbside until they arrive.

Cleaning up after a natural disaster can be dangerous. Here’s some advice on how to clean up safely and deal with hazardous waste.

Request clean up support »

Additional support

Use the Disaster Assistance Finder to generate a customised list of flood recovery services.

Also, taxpayers in flood-affected local government areas in NSW and QLD are provided with immediate tax relief to alleviate pressures on cash flow and operations.

The Treasurer announced that affected taxpayers will be eligible to receive the following concessions:

  • additional time to meet their upcoming Business Activity Statement (BAS) obligations
  • taxpayers paying PAYG instalments on a quarterly basis are eligible to vary upcoming instalments and receive a refund of previously paid instalments
  • claims for GST refunds will be expedited to ensure eligible taxpayers promptly receive their payments
  • small business and individual taxpayers will be able to notify the ATO about their circumstances to assist them in their situation.

The ATO has also announced that small businesses and individuals who need to lodge a BAS or instalment with an original due date of 28 February 2022 or 21 March 2022, and are not able to lodge by that date, may lodge these returns by 28 March 2022 without needing to request a lodgement deferral. Taxpayers who are unable to lodge by the new deadline of 28 March 2022 should contact the ATO and apply for a deferral as required.

The ATO has indicated that the payment due date will remain the same for these returns, but they will take an empathetic approach to the situations of affected taxpayers. Note that this concession does not apply to significant global entities or large businesses, who should contact the ATO to discuss their situation.

The ATO understands that tax is not your number one priority at this time, however you are encouraged to lodge when you can. The ATO has established an emergency Infoline on 1800 806 218 to answer any questions or provide urgent support to taxpayers.

Mental health support

Natural disasters, cleaning up and recovery can take a toll on your mental and physical health. It’s important for you to seek support and look after your own and your employees’ wellbeing.

Find out more »

CONTACT ALLAN HALL