Australian Business Number (ABN)
Activity Statement (see Business Activity Statement) Business Activity Statement (BAS)
Allowance
Annual leave (AL)
Apprentice
Australian Securities & Investments Commission (ASIC)
Australian Taxation Office (ATO)
Award
Backpay
BAS agent
BAS service is defined in the Tax Agent Services Act 2009 (TASA) as:
BAS provision is defined in Income Tax Assessment Act 1997 as:
Bereavement leave (see Compassionate leave) Bonus
Break
Bullying (see Workplace bullying) Business Activity Statement (BAS)
Casual employee
Child support
Clothing allowance an amount of money to compensate for the purchase of clothes for work, school, etc. (www.collinsdictionary.com) Commission payment
Commissioner of Taxation
Compassionate leave
Contractors (also independent contractors and subcontractors)
Employee vs contractor
Enterprise Agreement
Employment Termination Payment (ETP)
Source: www.ato.gov.au Workplace bullying
Fair Work Commission
Fair Work Ombudsman
BAS stands for Business Activity Statement. It is a form prepared and lodged with the Australian Taxation Office (ATO) to report tax obligations which include:
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. What 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 National 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 Minimum 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 Some of the changes to Fair Work Act include:
For more information check out Fair Work Have a great weekend! By 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. From 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 So 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 Protected 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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January 2016
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