Are You Meeting Your Obligations As An Employer Our core purpose is “HELPING CLIENTS ACHIEVE FINANCIAL SECURITY’ MULCAHY & CO | P 03 5330 7200 | INFO@MULCAHY.COM.AU | 300B GILLIES ST NTH, BALLARAT
The Fair Work Ombudsman (FWO) has recently completed an audit of employers and the results aren’t great. It has been revealed an overall compliance rate with workplace laws of just 52 per cent, with over 800 employers shortchanging 4,540 workers out of $2.3 million. This is why it is so important to keep on top of these obligations including record keeping to ensure your business is compliant of its responsibilities.
RECORDS YOU NEED TO MAINTAIN You are required, by the The Federal Fair Work Act 2009 to keep and maintain records of the dates and hours your employees work for you and how much they’re paid. The Act also requires you to give employees regular payslips with these details, as a hard copy or in electronic form. Good record keeping makes sure you pay workers correctly. It also gives you useful information to forecast future costs and can add value to your business when you look to sell it. Other employee records you are obliged to keep are: •
start and end date of employment or contract end date
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what agreement covers their employment e.g. award, workplace agreement, contract
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start and finish times of overtime hours worked for employees entitled to overtime penalty rates or loadings
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leave accruals e.g. annual leave and personal leave
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superannuation fund and contribution details.
Employing new staff
When you offer your employee a choice of super fund, you must tell them the name of the fund you will pay their super to if they don’t choose a fund.
Once you have advertised and recruited a new staff member you need to ensure that your record keeping is correct from the beginning, which will make maintaining it easier in the long term.
You provide this information to your employees by completing section B of the Standard choice form.
This includes providing the following:
Check the list of complying super funds to find a default fund that’s right for your business.
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A letter of position offer/ contract, outlining employment conditions and job salary
FAIR WORK INFORMATION STATEMENT
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Job description
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Employees information, including bank account details. It is easier if a form is created which lists all of these details and can be put into the employee’s file. Staff details template
As of 1 January 2010 employers covered by the national workplace relations system must provide all new employees with the new Fair Work Information Statement. It provides basic information for workers on matters that will affect their employment and points to where they can find out more on terms and conditions of employment.
TAX FILE DECLARATION FORM This is required so the employer can take out the relevant amount of tax when paying wages. These can be completed and lodged with the ATO via the employee section of Xero or via paper form which can be provided at our office.
SUPER CHOICE FORM This is required so the employer can pay superannuation into the employee’s chosen fund. Copies are available on the ATO website. Standard super provider choice form Employees can choose their own superannuation fund or retirement savings account.
MODERN AWARDS Modern Awards cover most Australian employers and employees and contain the minimum terms and conditions for employees in particular industries and occupations, including allowances specific to the occupation. Find the right award
MINIMUM WAGE Generally, employees in the national system cannot be paid less than minimum wage and minimum wage will be outlined in your award or agreement including overtime and weekend penalty rates. Find the right pay rate
IMPORTANT DISCLAIMER: This document does not constitute advice. Clients should not act solely on the basis of the material contained in this document. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of these areas. This document is issued as a helpful guide to clients and for their private information.
ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU
MULCAHY & CO | P 03 5330 7200 | INFO@MULCAHY.COM.AU | 300B GILLIES ST NTH, BALLARAT
Superannuation requirements and payments HOW MUCH SHOULD I PAY? The Superannuation Guarantee rate remained at 9.5% for the 2015/2016 financial year, and again remains at 9.5% for the 2016/2017 financial year.
WHO DO I PAY IT TO? There is now a new obligation for employers to send superannuation data and payments electronically, called SuperStream.
Large and Medium employers (those with greater than 20 employees) should have changed over to using a SuperStream solution by 31 October 2015 and smaller employers (less than 20 employees) have until 30 June 2016. Super payments for all employees can be made to the Small Business Superannuation Clearing House for businesses with 20 employees or less. This means that you can pay one lump sum for all employees, even if they are with different super funds. Small Business Superannuation Clearing House If you are currently using Xero accounting software, you can have the clearing house setup via your current file.
BASIC TAXATION OFFICE INCOME TAX REQUIREMENTS If you have employees you generally withhold money from the payments you make to them, which is called Pay As You Go withholding (PAYG withholding). As an employer, you will need to: •
register for PAYG withholding with the Tax Office
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calculate how much to withhold from payments and report
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record and pay the amounts in your monthly or quarterly business activity statement (BAS)
In addition to this, payment summaries are to be provided to staff by the 14th July each year, with the annual PAYG withholding summary report to be provided no later than the 30th September (using a tax agent).
WORKCOVER If you expect to pay more than $7,500 a year in rateable remuneration, or if you have any apprentices or trainees, you must register for WorkCover insurance. This applies even if you are a small company with only one worker. If you add employees during the year you should also monitor your rateable remuneration that you have estimated to ensure you do not go outside the 20 percent threshold to avoid penalties.
Other taxes that may affect employers FRINGE BENEFITS TAX (FBT)
This is a tax paid on certain benefits employers provide to their employees or their employees’ associates (typically family members) in place of, or in addition to, salary or wages. FBT is separate from income tax and is based on the taxable value of the fringe benefit. Employer’s guide to fringe benefits tax.
level of $45,833 a month or $550,000 over the full financial year; and/or it is grouped with other businesses and the combined Australian wages of the group exceed the Victorian general exemption level. Check the State Revenue Office website for further details.
WHAT IF AN EMPLOYER GETS IT WRONG? Any breach in the terms contained in a Modern Award or a national minimum wage order may be investigated and enforced by the Fair Work Ombudsman (FWO). This may result in long and expensive audits and costly penalties. A breach in terms includes: •
pay rates
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conditions of emplotment (e.g. annual leave or sick leave)
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unlawful workplace discrimination
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workplace rights.
Additionally the adverse publicity could seriously damage the reputation of a business. The cost of getting it right is minimal in comparison to the cost of defending any actions taken against a business. It is ultimately beneficial to the future and viability of your business.
We offer a free no obligation meeting to review your situation. Call us today on 03 5330 7200 and take advantage of this valuable offer.
PAYROLL TAX Payroll tax is a Victorian state tax; currently payable at the rate of 4.85 percent calculated on wages paid by an employer. The State Revenue Office (SRO) collects and administers payroll tax. Victorian employers must register for and pay payroll tax if their total Australian wages exceed the Victorian general exemption
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IMPORTANT DISCLAIMER: This document does not constitute advice. Clients should not act solely on the basis of the material contained in this document. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of these areas. This document is issued as a helpful guide to clients and for their private information.
ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU