It can be a headache for business owners navigating their way through the minefield that is payroll compliance.
I was chatting with a client who best described it as a game of Snakes and Ladders. We laughed but she was dead right. It seems that as soon as you get your payroll groove on and start getting ahead, climbing ladders (so to speak!), a law changes or a requirement is updated and off you go sliding back down to where you started.
In the last two blogs we talked about the payroll process and also employee payslips and how to get them right.
It is a tough area to stay on top of, so to help you we have put together a payroll compliance guide for business owners with some key requirements and terms so you can keep on top of it all.
Wages and Salaries
This is the total remuneration, in cash or kind, payable to all persons counted on the payroll in return for work completed. It can be paid weekly, fortnightly, or monthly. Getting it right keeps your team happy and prevents infringements and penalties.
A specific amount paid in addition to an agreed salary such as allowances for tools, uniforms and overtime. These depend on the industry and the Award.
This is a way for employees to save for retirement. A percentage of an employee's wage or salary is deposited into a superfund account. Penalties are high when super is not calculated correctly or paid on time.
There is a variety of payments that may be required from time to time such as salary sacrifice, workers compensation, bonuses, maternity leave and long service leave.
Applicable when your total wage bill exceeds a threshold amount. Paid monthly, payroll tax rates and thresholds vary between states and territories.
An Instalment Activity Statement (IAS) is applicable for taxpayers who make PAYG instalments and completed monthly.
A Business Activity Statement (BAS) is a monthly or quarterly reporting requirement from the ATO. It's used for reporting and paying GST and includes PAYG instalments, and PAYG withheld from your employees wages.
Fringe Benefits Tax is the tax employers pay annually on certain benefits they provide to their employees, including their employees family or other associates.
PAYG Payment Summaries
Payment Summaries are historically what employers would provide to their employees at the end of a financial year, summarising the total wages paid and tax withheld from those wages. This was retired on 30 June 2019 with the roll-out of STP.
Single Touch Payroll (STP)
STP is the technology platform whereby payroll software submits payroll data to the ATO everytime a payrun is processed.
And if you don’t know your BAS from your IAS or your PAYG from your FBT, that is absolutely fine. Remember that iKeep Bookkeeping, as specialists in cloud accounting and online payroll solutions, are here to help.
One of the benefits our clients find when they transfer payroll from a traditional, manual payroll System to a streamlined cloud accounting approach is the minimal fuss around when a law or requirement gets updated or changed or even a brand new one created. Clunky manual updates are replaced by automated and streamlined processes that mean less time and money spent on administrative requirements for you as the business owner or your accounts person.
While it’s good to have knowledge of the legal requirements and the terms we’ve shared with you in the guide today, it’s also good to outsource bookkeeping the intricacies of bookkeeping to a team who definitely know their BAS from their IAS and what to do with it! Book a call with one of our experts to learn more about how we can help with your payroll processing.