Hopefully by now you have cross-checked your payroll data and are satisfied that everything is correct. The next step is to let the ATO know that you’re done for the year by finalising your Single Touch Payroll (“STP) information.
STP Finalisation Declaration
It’s important that you finalise your employees’ data sooner rather than later, because once the STP finalisation has been sent to the ATO, the employee’s information will be released in their myGov account and listed as ‘tax ready’. Because of this there is no need to issue payment summaries to employees you have reported through STP, it’s now all automatic, which is great.
The deadline to finalise payroll for most employers (employers with arm’s length employees) has been extended until 31 July, an extension from the usual due date of 14 July.
If you have a mixture of closely held payees and arm’s length employees then the deadline is the 30 September or for employers who only have closely held payees then the due date is the date of the payee’s income tax return Gold Coast.
Please let us know if you need a hand with this and/or if you would like us to make the finalisation declaration on your behalf.
Superannuation Guarantee increase from 1 July 2021
On 1 July 2021, the super guarantee rate increased from 9.5% to 10%. If you have employees, you will need to ensure your payroll and accounting systems are updated to incorporate the increase to the super rate.
If a contribution increases, you’ll need to pay your employees the new minimum amount. The new rates apply to the payment date of a pay run, not the pay period.
Xero will handle superannuation guarantee (SG) contribution rate increases and update them for you, providing the “statutory rate” option has been applied. Whereas if you have manually keyed in the rate then you will need to manually update it, or better still, select the statutory rate option moving forwards.
It’s important you pay your workers the correct amount of super. The ATO’s superannuation guarantee eligibility decision tool will help you determine if your employees are eligible for super, including any contractors treated as employees for super purposes, which you can find here: Superannuation guarantee eligibility decision tool | Australian Taxation Office (ato.gov.au)
Annual Returns for Payroll Tax
Payroll tax is a self-assessed tax on the wages that employers pay to their Queensland employees when the total wages are more than a certain threshold. This is a state-based tax which, for Queensland, is administered by the Office of State Revenue (“OSR”). We will focus on the Queensland regulations in this article.
You must register for payroll tax within 7 days after the end of the month in which you pay more than $25,000 a week in Australian taxable wages or become a member of a group that together pays more than $25,000 a week in Australian taxable wages. So, in other words, even if you think you will pay less than $1.3 million within one financial year, as soon as you exceed the weekly amount of $25,000 you must register.
Businesses may be grouped and treated as one unit for payroll tax if they are related or connected.
The definition of taxable wages is quite broad and extends beyond wages, it also includes third-party payments, superannuation contributions, and salary sacrifice contributions.
The annual payroll tax return breaks down the year’s taxable wages and is used to calculate your liability for the year. You must lodge your annual return by 21 July each year for the previous financial year and pay any outstanding amounts.
If you have overpaid tax for the year, the Office of State Revenue (“OSR”) will apply the amount to other outstanding liabilities you may have, then refund you any remaining amount.
You will also need to notify OSR if your business conditions have changed, including changes to members of a group employer. Also, If you have a COVID-19 deferral, you still need to lodge and pay your annual payroll tax amount by 21 July 2021. Any deferred periodic returns remain payable on the deferred due date.
This is a complex area, so please let us know if you need help looking at your payroll tax.