Nailing your obligations as an employer
Tax time is right around the corner and the ATO looks at the key things employers need to know to meet their tax and super obligations.
You need the best tools to do the best job. A good knowledge of your obligations is the best tool for getting your employees’ tax and super right. Here’s some vital information to pop into your employer toolbox.
Managing payroll for tax and super
You must do the right thing by your employees and collect pay-as-you-go withholding (PAYGW) amounts.
To make this easier, get your payroll in order. Be sure you’re:
- keeping good records;
- complying with PAYGW, Super and Single Touch Payroll (STP) reporting, as well as your FBT obligations; and
- reconciling amounts you report in STP, amounts in your activity statements and payments you make, through the systems you have in place.
It’s a good idea to regularly review your payroll management practices so you know they’re fit for purpose.
What’s the super guarantee?
You must pay the Super Guarantee on behalf of eligible employees to support the retirement they’ve worked hard for. In this case, eligible employees may also include contractors you’ve hired mainly for their labour.
The current SG is 10.5% of your employee’s ordinary time earnings. It goes up to 11% from 1 July 2023. Make sure you:
- pay and report super electronically so it meets SuperStream requirements, and
- pay SG at least four times a year by 28 January, April, July and October.
Get those payments in on time. If you don’t, you’ll have to lodge an SG Charge (SGC) statement and pay the SGC to the ATO. The SGC will cost you more than the super you should have paid, and you won’t be able to claim it as a deduction.
If you do have to lodge an SGC statement, make sure you do that on time too. If you don’t, or you don’t provide a statement or information when requested, you could also face a penalty of up to 200% of the SGC charge.
Getting ready for 2023 fringe benefits tax (FBT)
If you provided benefits such as a car or a ute to employees between 1 April 2022 and 31 March 2023, you’ll need to:
- work out if these benefits attract FBT, and
- lodge your FBT return and pay the liability by 22 May (though this day may differ if you use a tax agent).
Remember, if you or any of your employees use a work ute for personal use such as weekend getaways or towing your boat you may have an FBT liability.
You might be eligible for exemptions and concessions to reduce the amount of FBT you pay.
As an employer, find all the info you need at ato.gov.au/employers or get advice from your registered tax advisor.