WEEK 1 - PAYROLL What do employees (staff) get paid? Sources of information – Fair Work Australia, Australian Taxation Office (ATO) and TFN declaration form

Fair Work Australia Fair Work Ombudsman Employment Awards Enterprise Agreements National Employment Standards Fair Work Ombudsman Independent from Govt & free service for employees, employers, contractors Offers assistance, Educates, Investigates, Litigates, Helps build effective and stronger relationship.

Homework 1) Go to Fair Work Australia website and answer the following:  Find the award for an 18year old employee who makes coffees for a café shop – a barista. (Modern awards - fast food industry award – mostly take away coffees) How much per hour would they earn if they are employed on a casual basis ($683.40 /38 hours x 70% + 25% casual loading = $15.74/hour) What does on a casual basis mean (<38 hours per week and not regular shifts) Are they entitled to any additional payments (laundry @ $1.25/shift) Are they entitled to sick leave or holiday pay (no) What happens if they work on a Saturday or a Sunday (Sat further 25% loading, Sunday 75% of ordinary rate – not casual rate) 2) Look up Fair Work Information Statement and determine the 10 minimum employment terms and conditions. (see statement) 3) Look over the glossary and familiarize yourself with terms

Australian Taxation Office - ATO Employers generally need to withhold tax from payments made to their employees and directors. Contractors are self-employed and have a contract with you to provide services. They meet their own tax obligations. To determine whether a worker is a contractor or an employee use ATO decision tool www.ato.gov.au/employeecontractor

PAYG Taxation Employers generally need to withhold tax from payments made to their employees and directors. There is a threshold below which no tax is payable so some workers may not be required to pay tax Businesses have obligations if they withhold money under PAYG system:- What are these requirements? Register Keep records & explanations Collect TFN Declaration Withhold prescribed amounts Send withheld amounts to ATO with report by due dates Provide PAYG Summaries end of Financial Year or when Terminated

PAYG Registration Requires an ABN (Australian Business Number) a unique 11 digit identification number available to Australian businesses not compulsory but is compulsory if required to be PAYG registered Can register online (can register for ABN & PAYG at same time) Register via the business portal www.abr.gov.au An amount of 46.5% will be withheld from contractors that do not have an ABN (unless under $75) or do not provide an invoice (also part of PAYG Withheld System)

A TFN Declaration Form to be completed by new employees. Tax File Number - TFN a unique identification number for each taxpayer (eg individual, company) used by ATO to match records, detect irregularities required for Centrelink payments A TFN Declaration Form to be completed by new employees.

TFN Declaration Form Provides information relevant to paying the employee (see TFN Dec Form esp qtns 8 & 11) Completed only once by employee (section A) and employer (section B) Employer sends original form within 14 days to ATO Not compulsory for employee to complete but:- Employer will send TFN form with the available information Employer will deduct 46.5% tax (max rate + medicare levy) instead of lower rate Withholding Declarations- Used to amend info on TFN Declaration or for employee request of deducting more tax form pay

Medicare Levy a publicly funded scheme that gives Australian residents access to health care To help pay for the scheme a levy of 1.5% x taxable income is imposed on most taxpayers. (above threshold and factored in tax tables) A Medicare Surcharge is also payable by high income earners without private hospital cover

Fringe Benefits Tax paid on certain benefits paid to employees or their associates by their employers in lieu of wages E.g. cars used for private use, low interest employee loans, personal expense payments such as school fees or rent, entertainment allowances. Exempt benefits include: Minor, irregular benefits (<$300) Certain work-related items such as portable electronic devices e.g. phones, laptops, ipads, protective clothing, briefcases, tools of trade, computer software. Fringe Benefits are taxed separately from income tax Paid by the employer not the employee. FBT is paid via the BAS/IAS form. Fringe benefits over $2000 per year are reported on employee PAYG summaries (grossed up by 1.8692)

Superannuation Guarantee Employees complete a Superannuation Standard Choice Form All employers are required to provide superannuation for each employee except for the following: Earning less than $450 per calendar month Aged 70 now entitled as from 1/7/2013 <18 and working < 30 hours per week Employees employed by non – business employers to do domestic or private work for < 30 hours per week (e.g. cleaning, babysitting) Maximum required contribution is $48,040/qtr currently Tax deductible for employer Additional super paid may incur FBT

Payroll is a BAS service! Thus requires a registered agent The Tax Agents Services Act 2009 requires bookkeepers who charge a fee for providing BAS services to be registered as BAS agents. Payroll is a BAS service! Thus requires a registered agent This does not apply to bookkeepers working as employees since the owner takes responsibility for returns lodged by the business. To be registered a bookkeeper must be : At least 18 Be a fit and proper person Meet certain qualification and experience requirements Be covered by Professional Indemnity Insurance Agree to abide by the TPB Code of Professional Conduct.

Homework 1) Go to Fair Work Australia website and answer the following:  Find the award for an 18year old employee who makes coffees for a café shop – a barista. (Modern awards - fast food industry award – mostly take away coffees) How much per hour would they earn if they are employed on a casual basis ($683.40 /38 hours x 70% + 25% casual loading = $15.74/hour) What does on a casual basis mean (<38 hours per week and not regular shifts) Are they entitled to any additional payments (laundry @ $1.25/shift) Are they entitled to sick leave or holiday pay (no) What happens if they work on a Saturday or a Sunday (Sat further 25% loading, Sunday 75% of ordinary rate – not casual rate) 2) Look up Fair Work Information Statement and determine the 10 minimum employment terms and conditions. (see statement) 3) Look over the glossary and familiarize yourself with terms