Sat, 11 May 2024 15:14:04 -0700WeeblyMon, 01 Feb 2016 06:23:07 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/payroll-terms-a-fAustralian Business Number (ABN)

• is a unique number issued to a business by the government through the Australian
• visit www.abr.gov.au

Activity Statement (see Business Activity Statement)


Business Activity Statement (BAS)

• is a form prepared and lodged with the Australian Taxation Office (ATO) to report tax obligations relating to Goods and Services Tax (GST), Pay-As-You-Go Withholding (PAYGW), Pay-As-You-Go Instalment (PAYGI), Fringe Benefits Tax (FBT), Wine Equalisation Tax (WET), Luxury Car Tax (LCT), Amounts withheld where no ABN is quoted and other instalments
• visit www.ato.gov.au

Allowance

• Employers often pay employees various types of allowances either to compensate them for unfavourable working conditions or to cover estimated expenses. Allowances are also commonly paid to comply with award requirements. Common examples of allowances include motor vehicle, tools, accommodation, tea, meal, travel, dirt and first-aid allowance.  Allowances are generally subject to payroll tax 
• Source: www.payrolltax.gov.au

Annual leave (AL)

•  (also known as holiday pay) allows an employee to be paid while having time off from work (www.fairwork.gov.au)

Apprentice

• a person who learns a job or skill by working for a fixed period of time for someone who is very good at that job or skill (www.merriam-webster.com)

Australian Securities & Investments Commission (ASIC)

•  is Australia’s corporate, markets and financial services regulator
• visit www.asic.gov.au

Australian Taxation Office (ATO)

• the principal revenue collection agency of the Australian government whose role is to effectively manage and shape the tax and superannuation systems that support and fund services 
• visit www.ato.gov.au

Award

• are enforceable documents containing minimum terms and conditions of employment in addition to any legislated minimum terms 
• Source: www.fwc.gov.au

Backpay

• Past wages and benefits (bonus, increment, overtime, etc.) to which an employee is entitled either because of a retroactive increase or employment practices (such as dismissal or denial of promotion) declared unlawful by a court or tribunal (www.businessdictionary.com)

BAS agent

• a professional who provides a BAS service defined in the Tax Agent Services Act 2009 (TASA)
• a professional who provides a BAS service for a fee must be registered

BAS service 
is defined in the Tax Agent Services Act 2009 (TASA) as:

• working out or advising about the liabilities, obligations or entitlements of a client under a BAS provision; or
• representing a client in their dealings with the Commissioner of Taxation in relation to a BAS provision; and
• where it is reasonable to expect a client will rely on the service to satisfy liabilities or obligations or to claim entitlements under a BAS provision
• Souce: www.tpb.gov.au

BAS provision
is defined in Income Tax Assessment Act 1997 as:

• Part VII (collection and recovery only) of the Fringe Benefits Tax Assessment Act 1986
• the indirect tax laws, including the goods and services tax (GST) law, the wine tax law, the luxury car tax law, the fuel tax law, and Parts 2-5 and 2-10 in schedule 1 of the Tax Administration Act 1953, which are about the pay as you go (PAYG) system 
• Source: www.tpb.gov.au

Bereavement leave (see Compassionate leave)


Bonus

• money or an equivalent given in addition to an employee's usual compensation (www.merriam-webster.com)

Break

• allows an employee to rest for a short period of time during work hours
• rest breaks are also referred to as 'crib breaks', 'rest pauses' or 'tea breaks'
• a meal break is a longer period of uninterrupted rest that allows the employee to eat a meal

Source: www.fairwork.gov.au


Bullying (see Workplace bullying)


Business Activity Statement (BAS)

• is a form prepared and lodged with the Australian Taxation Office (ATO) to report tax obligations relating to Goods and Services Tax (GST), Pay-As-You-Go Withholding (PAYGW), Pay-As-You-Go Instalment (PAYGI), Fringe Benefits Tax (FBT), Wine Equalisation Tax (WET), Luxury Car Tax (LCT), Amounts withheld where no ABN is quoted and other instalments 
• visit www.ato.gov.au

Casual employee

• has no guaranteed hours of work; 

• usually works irregular hours;

• doesn't get paid sick or annual leave;

• can end employment without notice, unless notice is required by a registered agreement, award or employment contract
• Source: www.fairwork.gov.au

Child support

• means financial support under this Act, including financial support under this Act by way of lump sum payment or by way of transfer or settlement of property
• Source: www.austlii.edu.au

Clothing allowance
an amount of money to compensate for the purchase of clothes for work, school, etc. (www.collinsdictionary.com)


Commission payment

• is an amount paid to an employee based on how much they sell
• is normally calculated as a fee or percentage of the employee’s total sales. A commission payment can be called a ‘bonus’ or ‘incentive payment'

• can be paid as an extra incentive on top of an employee’s pay or
• make up an employee’s whole wage (commission only payments)
• Source: www.fairwork.gov.au

Commissioner of Taxation

• head of the Australian Taxation Office (ATO)

Compassionate leave

• a type of leave that can be taken when a member of an employee's immediate family or household dies or suffers a life-threatening illness or injury
• All employees are entitled to 2 days compassionate leave each time an immediate family or household member dies or suffers a life threatening illness or injury
• Source: www.fairwork.gov.au

Contractors (also independent contractors and subcontractors)

• workers who run their own business;
• usually negotiate their own fees and working arrangements and can work for more than one client at a time. Independent contractors are often called contractors or subcontractors (subbies).
• Source: www.fairwork.gov.au

Employee vs contractor

• There are a number of factors which may contribute to determining the difference between an employee and an independent contractor. However, it is important to note that no single indicator can determine if a person is a contractor or an employee. Each determination is based on the individual merits of the work arrangement in place. Courts always look at the totality of the relationship between the parties when determining the status of a person's employment
• There are some common indicators that may contribute to determining whether a person is an employee or independent contractor
• For more information, visit www.fairwork.gov.au

Enterprise Agreement

• On 1 July 2009, the various types of collective and individual workplace agreements that existed under the previous workplace relations system were replaced by a single type of agreement: an 'enterprise agreement'. This is simply an agreement between one or more national system employers and their employees, as specified in the agreement. Enterprise agreements are negotiated by the parties through collective bargaining in good faith, primarily at the enterprise level. Under the Fair Work Act 2009, an enterprise can mean any kind of business, activity, project or undertaking.
• Source: www.fairwork.gov.au

Employment Termination Payment (ETP)

• is a lump sum payment you make to an employee when they stop working for you. ETPs are taxed at different rates depending on your employee’s age and length of employment

Source: www.ato.gov.au



Workplace bullying

• repeated and unreasonable behaviour directed towards a worker or a group of workers that creates a risk to health and safety 
• Source: www.safeworkaustralia.gov.au

Fair Work Commission

• (previously called Fair Work Australia) is an independent government organisation regulate Australia’s workplace relations system
• is the independent national workplace relations tribunal responsible for maintaining a safety net of minimum wages and employment conditions, as well as a range of other workplace functions and regulation
• visit www.fwc.gov.au and www.fairwork.gov.au

Fair Work Ombudsman

• enforces compliance with the Fair Work Act, related legislation, awards and registered agreements
•  helps employers and employees by providing advice and education on pay rates and workplace conditions
• visit www.fwc.gov.au and www.fairwork.gov.au

]]>Sun, 31 Jan 2016 06:44:06 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/what-is-basBAS stands for Business Activity Statement. It is a form prepared and lodged with the Australian Taxation Office (ATO) to report tax obligations which include:

• Goods and Services Tax (GST)
• Pay-As-You-Go Withholding (PAYGW)
• Pay-As-You-Go Instalment (PAYGI)
• Fringe Benefits Tax (FBT)
• Wine Equalisation Tax (WET)
• Luxury Car Tax (LCT)
• Amounts withheld where no ABN is quoted
• Other instalments

Depending on how small or big a business is based on the turnover or sales, a business can have a monthly, quarterly or a yearly BAS. Most small businesses do their BAS quarterly.]]>Sun, 01 Jun 2014 05:31:31 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/base-rate-of-payWhat is base rate of pay?

According to Fair Work Act 2009, Section 16, the base rate of pay is the rate the employee gets paid working for ordinary hours. It does not include loadings, overtime or penalty rates, incentive-based payments and bonuses, monetary allowances and any other separately identifiable amounts.

Under the national workplace relations system, base pay rates that generally depend on age, job classification and employment category usually come from an enterprise agreement or modern award. If the employee is not covered by an award the national minimum wage applies.

Why is base rate of pay important?

There are payments under the National Employment Standards (NES) that are paid at the base rate of pay:

·        Annual leave

·        Personal leave

·        Public holiday

·        Make-up pay relating to jury service

·        Redundancy pay

It is also important to distinguish the base rate of pay from the full-rate of pay. It is defined in Section 18 of the Fair Work Act. It includes incentive-based payments and bonuses, loading, monetary allowances, overtime or penalty rates and any other separately identifiable amounts. When an employer terminates an employee, the full rate of pay is paid to the employee in lieu of the notice – which is the hours the employee would have worked had the employment continued until the end of the minimum period of notice.

Source: www.fairwork.gov.au
]]>Sat, 31 May 2014 04:49:55 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/national-employment-standards-nesNational Employment Standards

As of the 1st of January 2010, there are minimum conditions of employment on a federal level embodied in the National Employment Standards (NES). These standards are set out in the Fair Work Act 2009 that contains ten minimum standards of employment. They were a means of maintaining a safety net of fair working conditions. The standards address minimum wages, working hours, leave entitlements and termination. A contravention of a provision of NES may result to penalties of up to $10,200 for an individual and $51,000 for a corporation. These standards are listed here and explained in detail in succeeding chapters. Fair Work Act 2009 became effective on the 1st of July 2009 which replaced most of the Australian workplace systems.

The ten national employment standards are:

1.     Maximum weekly hours of work are 38 hours per week plus reasonable additional hours.

2.     Ability to request for flexible working arrangements in certain circumstances

3.     Parental leave and related entitlements

4.     Paid annual leave of four weeks paid leave plus additional week for certain shift workers

5.     Paid personal leave of ten days (covers sick and carer’s leave) except casual employees

6.     Community service leave such as voluntary emergency service and jury service

7.     Long service leave – this is generally governed by state and territory laws while the development of a national long service leave standard is pending

8.     Public holidays that are paid day off on public holidays except where reasonably requested to work

9.     Notice of termination and redundancy – up to five weeks’ notice of termination and 16 weeks’ severance pay on redundancy which is based on the employee’s length of service

10.  Provision of Fair Work Information Statement must be provided by employers to all employees. The statement contains the National Employment Standards (NES), modern awards, agreement-making, the right to freedom of association, termination of employment, individual flexibility arrangements, among others.

For more information please visit www.fairwork.gov.au

Source: www.fairwork.gov.au
]]>Sat, 31 May 2014 04:47:11 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/minimum-wage-and-modern-awardsMinimum wage and modern awards 
Employees in the national system generally cannot be paid less than minimum wage and minimum wage will be outlined in your award or agreement. Modern Awards cover most Australian employers and employees and contain the minimum terms and conditions for employees in particular industries and occupations. The current full-time minimum wage is $16.37 per hour or $622.20 per week. Casuals covered by the national minimum wage get an extra 24% ($20.30 per hour)

While modern awards contain minimum wages, some modern awards have transitional arrangements in place, whereby the wage-related components that came into effect 1 July 2010 may be phased in over five years with transitional provisions on:

·        base rates of pay, including piecework rates

·        casual and part-time loadings

·        Saturday, Sunday and public holiday penalty rates

·        evening and other penalty rates   

·        shift allowances or penalties.

It is important that employers check the relevant Award. These are generally found in Schedule A of the award. Search for your modern award using the Fair Work Ombudsman’s new Award Finder.

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). The investigation may result in expensive audits and penalties and the breach may be in terms of:

·        pay

·        conditions (annual leave or sick leave)   

·        unlawful workplace discrimination   

·        workplace rights


Source: www.fairwork.gov.au

]]>Fri, 03 Jan 2014 21:18:51 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/changes-to-fair-work-act-as-at-1-januarySome of the changes to Fair Work Act include:

• arbitration available for dismissal disputes at the Fair Work Commission
• changes to right of entry
• new anti-bullying measures
• new consultation terms when changing regular rosters and working hours
• new timeframes for unlawful termination applications
• updated superannuation terms

For more information check out Fair Work


Have a great weekend!]]>Fri, 03 Jan 2014 06:33:52 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/new-year-new-habitsBy now, you would have already checked and updated your payroll systems based on last week’s blog on things to remember as at 1 January.

As it is a new year, perhaps it’s time to start thinking about being proactive in our learning and spend a few minutes every week to keep ourselves up-to-date of what’s happening with Fair Work and the ATO. There are few ways to do this:

1.      Subscribe to Fair Work’s enewsletter on their website

2.      Follow the ATO on twitter @ato_gov_au or look up Australian Taxation Office on facebook

3.      Follow Fair Work on twitter @fairwork_gov_au or look up fairwork.gov.au on facebook

4.      Follow the Treasury department on twitter @Treasury_AU

5.      If you’re a member of a professional organisation, you would probably receive emails or newsletters as well

With all these different ways, it’s probably best to just pick one or two ways and stick with them. Do not get overwhelmed with too much information.

Next week we start exploring on some of the common issues payroll professionals have so we’ll see you next week.]]>Thu, 02 Jan 2014 09:11:24 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/mysuper-for-employersFrom 1 January 2014, employers must make super contributions to a fund that offers a MySuper product.  MySuper is a new super product that will replace existing default products.

Employers generally have a default fund, where they make super guarantee payments for employees who have not selected a preferred fund.

In 2013, super funds have been obtaining authorisation for the new MySuper products. Funds are advising employers of arrangements for paying their super guarantee contributions.

Basically you need to check your existing default fund arrangements and if they have advised you of their MySuper arrangements.


You can also visit the ATO website for more information about superannuation for employers: Guide to superannuation for employers.




Source:  www.ato.gov.au

]]>Thu, 02 Jan 2014 06:36:36 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/things-to-check-onthe-1st-ofjanuarySo far this week, we have identified three things that employers need to check as at 1 January 2014:

1.   Increase of Protected Earnings Amount (PEA) for child support deductions to $339.23 per week. PEA is the amount of an employee's salary or wage that is exempt from Child Support deductions. This is basically the amount that must be left after tax and Child Support deductions. And since the cost of living increases, this amount is indexed every year and new amounts take effect every 1 January. Note that this may also apply to contractors.

Below are some calculations depending on your payroll frequency:

1. Daily $339.23 ÷ 7 days = $ 48.4614
2. Weekly $48.4614 x 7 days = $339.23
3. Fortnightly $48.4614 x 14 days = $678.46
5. Monthly $48.4614 x 30.4375* = $1,475.04

*Note: a year is equal to 365.25 days (allowing for the leap year), 30.4375 days in a month is equal to 365.25 divided by 12. Figures are rounded where applicable.

When making the full Child Support deduction that would take the employee's net pay under the PEA amount, the amount that you can deduct is only up to the amount that will leave the PEA. You do not make a deduction of Child Support that leaves an employee or with a take home pay (after tax and Child Support deductions) of less than the PEA. That is why it is called Protected Earnings Amount.

For more information visit: http://www.humanservices.gov.au




2.   From 1 January 2014, employers must make super contributions to a fund that offers MySuper product. MySuper is a new super product that will replace existing default products.

Employers generally have a default fund, where they make super guarantee payments for employees who have not selected a preferred fund.

In 2013, super funds have been obtaining authorisation for the new MySuper products. Funds are advising employers of arrangements for paying their super guarantee contributions.

Basically you need to check your existing default fund arrangements and if they have advised you of their MySuper arrangements.

You can also visit the ATO website for more information about superannuation for employers: Guide to superannuation for employers.

Source:  www.ato.gov.au

 

3.   Some of the changes to Fair Work Act include:


- arbitration available for dismissal disputes at the Fair Work Commission
- changes to right of entry
- new anti-bullying measures
- new consultation terms when changing regular rosters and working hours
- new timeframes for unlawful termination applications
- updated superannuation terms

For more information check out Fair Work on www.fairwork.gov.au]]>Wed, 01 Jan 2014 23:50:08 GMThttp://accountsunplugged.com/bas-gst-payg-payroll/update-your-protected-earnings-amount-for-child-support-deductions-as-at-1-januaryProtected Earnings Amount (PEA) is the amount of an employee's salary or wage that are exempt from Child Support deductions. This is basically the amount that must be left after tax and Child Support deductions. And since the cost of living increases, this amount is indexed every year and new amounts take effect every 1 January. Note that this may also apply to contractors.


For 2014 weekly PEA for 2014 is $339.23. This is the amount that must be set aside for the employee after tax and Child Support is deducted. Below are some calculations depending on your payroll frequency:


1. Daily $339.23 ÷ 7 days = $ 48.4614
2. Weekly $48.4614 x 7 days = $339.23
3. Fortnightly $48.4614 x 14 days = $678.46
5. Monthly $48.4614 x 30.4375* = $1,475.04  


*Note: a year is equal to 365.25 days (allowing for the leap year), 30.4375 days in a month is equal to 365.25 divided by 12. Figures are rounded where applicable.



When making the full Child Support deduction that would take the employee's net pay under the PEA amount, the amount that you can deduct is only up to the amount that will leave the PEA. You do not make a deduction of Child Support that leaves an employee or with a take home pay (after tax and Child Support deductions) of less than the PEA. That is why it is called Protected Earnings Amount.


For more information visit: http://www.humanservices.gov.au/

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