Now June 30 has passed, there are administrative matters that require your prompt attention.
Year End Payroll Procedures
Employers not yet enrolled with Single Touch Payroll will need to prepare PAYG Summaries and the Annual PAYG Statement. This should only apply to those that employ only family members. If you have not received PAYG Summaries and the Annual Statement, please contact our office to obtain copies.
All employers are now required to use Single Touch Payroll. If you do not report (file) your payroll to the ATO each pay or if you do not use electronic payroll software, you are required to do so as from today (1 July 2021). If you require assistance, please contact our office prior to doing your first payroll for the 2022 Financial Year.
Employers enrolled in Single Touch Payroll will need to perform an End-of-Year finalization in their software. This process will involve the following steps:
- Reviewing the total pay of each employee to ensure the correct amount is reported.
- Pay attention to employees that were terminated during the year to ensure the correct break up of wages is reported.
- If there is a reportable fringe benefit amount it will need to be included as part of the finalization process
- Marking as final and filing with the Australian Tax Office.
Most software providers have made this process as straight forward as possible. You are able to finalize employees one at a time so that if you need to clarify something for one employee it does not stop prevent you finalizing some others. This is particularly relevant if you wish to finalize your employees pay records but not your own. In addition, no Annual PAYG Summary is required.
Finalization must be completed by 14 July if you have more than 20 employees, 31 July if you have less than 20 employees and 30 September for those employed in their own business.
2022 Financial Year Payroll Changes
The recent budget made some announces that will affect your payroll for this and future years. The following change will need to be made in your payroll software prior to doing you first pay for 2022:
- Compulsory Superannuation must be changed from 9.5% to 10%.
- ALL employees are now subject to COMPULSORY superannuation if they are under 75. The $450 per month threshold has been removed. Please ensure your employee records are amended to reflect this change
Taxable Payments Annual Report (TPAR or Contractors Statement)
The Taxable Payments Annual Report must be prepared by any business in the following sectors:
- Building and Construction Services (including services peripheral to this industry such as trades, floor coverings, air conditioning, architecture etc.)
- Cleaning Services
- Courier Services
- Road Freight Services
- Information Technology Services (IT)
- Security, Investigation and Surveillance Services
- Mixed Services (if you supply to one or more of the services listed above, this will include such things as florists who pay delivery drivers, event management teams etc.)
- Government Entities/Services
The information to be provided is the Contractor name and address, ABN and the gross amount you have paid them including GST. Reports need to be made in a specific format. We have paper copies of the relevant form available or alternatively it can be lodged via Online Services for Business https://onlineservices.ato.gov.au/business or via our Tax Agents Online facility.
These reports must be lodged by 28 August 2021.
Superannuation Payments
Superannuation for the June quarter MUST be paid by July 28. There are no extensions and failure to pay by the due date will require lodgement of a Superannuation Guarantee Charge Form with the Australian Taxation Office. This will incur penalties and interest. If you have not received the Superannuation details from an employee in time for the payment you must make the payment to your default fund and notify them.
Business Activity Statements
Business Activity Statements are due 28 July if you are preparing yourself or in August if we are preparing on your behalf.
Your annual payroll should be finalised and reconciled prior to lodgement to ensure you can make any adjustments in the appropriate BAS. In addition, if you have offset your FBT liability by employee contributions these should be included in your June BAS.
Payroll Tax
If your business pays wages of more then $1,200,000 in NSW you will be subject to Payroll Tax. This threshold includes wages, superannuation, allowances, and fringe benefits tax. The payroll tax return is due by 30 August 2021.
If you employ staff in other states, your payroll tax threshold will be adjusted to reflect those wages and the applicable payroll tax threshold in that state. We can assist you in this calculation if required.
As always if we can be of assistance do not hesitate to contact us.