july written in sand

Changes to your pay as you go withholding cycle

/in /by

Your pay as you go (PAYG) withholding cycle may change from 1 July

The ATO reviews PAYG withholding cycles every year, basing reviews on a business’s annual withholding amount.

The ATO writes to employers and tax agents in April to advise if a PAYG withholding cycle is changing. If affected, your reporting and paying obligations will change from 1 July.

Your new withholding reporting and payment cycle will be based on the amount you withheld and reported under your Australian Business Number (ABN) in all branches in 2022-23.

Medium withholders

You’re classified as a medium withholder if you withheld from $25,001 up to $1 million.

You’ll need to:

  • report your PAYG withholding amounts on your activity statement monthly
  • pay by the monthly due date
  • check that your stated withholding matches the amounts you reported using Single Touch Payroll (STP).

Large withholders

You’re classified as a large withholder if you withheld more than $1 million. You’ll get a new Payment Reference Number (PRN) to quote when you pay on the set payment dates.

You’re not required to report PAYG withholding on your activity statement. You should still reconcile your reported STP and paid amounts.

Changing your withholding reporting and payment cycle

You’ll need to make the changes to your payroll software before 1 July, to align your withholding reporting payments with the new due dates.

You can ask to stay on your existing cycle if you estimate your 2024-25 PAYG withholding amount will be less than the relevant threshold.

To do this, submit a completed Request to review ATO initiated PAYG withholding cycle change form within 21 days of receiving an ATO letter. Provide the reason for your request. This should include your change in circumstances and the estimated amount you expect to withhold in 2024-25.

Need payroll help for your business?

Notch Above Bookkeeping are Certified Xero bookkeepers offering agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero payroll services and get in touch on 1300 015 130 to discuss the plan which best suits the needs of your business.

For more information, visit ATO annual review of PAYG withholding cycles and review your record-keeping practices.

Source: ATO

hiring

New rules for fixed term contracts

/in /by

Changes to fixed term contracts apply from 6 December 2023

Key points

  • From 6 December 2023, new rules apply when engaging employees on fixed term contracts
  • A fixed term contract terminates at the end of a set period (for example, the contract ends after a set date or period of time or a season). This includes contracts where the employee is employed for a specific period
  • The new rules include a requirement for employers to give any employees they’re engaging on a new fixed term contract a Fixed Term Contract Information Statement (FTCIS)
  • There are limitations on how fixed term contracts can be used
  • There are some exceptions to whom these limitations apply.

Other upcoming workplace law changes

There are other upcoming changes to the Fair Work Act, including:

  • changes to authorised employee deductions
  • the right to superannuation in the National Employment Standards.

Need payroll help for your business?

Notch Above Bookkeeping are Certified Xero bookkeepers offering agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero payroll services and get in touch on 1300 015 130 to discuss the plan which best suits the needs of your business.

Find out more at Fair Work Act changes: Protecting Worker Entitlements.

advice

Employer gender pay gaps published

/in /by

Improving workplace gender equality

Gender pay gaps for nearly 5,000 Australian private sector employers have been published for the first time.

The results show that:

  • 30% of employers have a median gender pay gap between the target range of -5% and +5%
  • 62% of median employer gender pay gaps are over 5% and in favour of men
  • The rest (8%) are less than -5% and in favour of women
  • Across all employers, 50% have a gender pay gap of over 9.1%.

It comes after Labor’s reforms passed the Parliament last year, a key driver for employer action to speed up progress to close the gender pay gap in the workplace.

The Minister for Women, Senator Katy Gallagher, said the publication of employer gender pay gaps is a pivotal moment for gender equality in Australia.

For all employers, the publication of their gender pay gaps and workforce composition is an opportunity to assess their performance on gender equality and take action to improve it.

There is significant variation in the gender pay gap across different industries, ranging from the Construction Industry where the mid-point employer gender pay gap is 31.8% to the Accommodation and Food Services Industry with a mid-point employer gender pay gap of 1.9%.

Who needs to complete an annual WGEA report?

All private sector businesses with 100 or more employees are required to complete their WGEA report between 1 April and 31 May of each year. The report must provide data from the previous year for the date ranges of 1 April through to 31 March.

For more information about who needs to report and how to complete the WGEA report, please click:

Even if your company has fewer than 100 employees, it is important to be proactive in identifying potential inequalities within the workplace. Conducting a payroll audit and internal salary benchmarking are important steps to take.

Need payroll help for your business?

Notch Above Bookkeeping are Certified Xero bookkeepers offering agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero payroll services and get in touch on 1300 015 130 to discuss the plan which best suits the needs of your business.

Companies’ gender pay gaps are available on the Workplace Gender Equality Agency website: WGEA Data Explorer | WGEA

1 July Changes

/in /by

Changes business owners need to know about

There are legal, financial, and other changes your business will have to be across very soon. Not sure what they are or what to do? Don’t worry, we have you covered.

It’s been a big year for changes in areas like people management, pay and tax. Here’s a rundown of some key changes that will come into effect 1 July and what they mean for your business and your employees.

1. SUPER GUARANTEE INCREASES

If you haven’t already, then it’s time to get your payroll systems sorted as the superannuation guarantee increases to 11% from 1 July. The super guarantees for the current quarter will stay at 10.5%.

Also, make sure you’re across the gradual increases, which will see the super guarantee reach 12% by July 2025.

To work out how this will impact employees’ pay, have a look at whether their contract states their salary is inclusive of superannuation or not.

2. WAGES GO UP

Employees should also be aware that from 1 July, wage increases will come into effect following a ruling from the Fair Work Commission.

For employees who aren’t covered by an award, the minimum wage will go up from 1 July to $882.80 per week, or $23.23 per hour, and will apply from the first full pay period starting on or after 1 July 2023.

For employees covered by an award, minimum award wages will increase by 5.75%, also applying to the first full pay period starting on or after 1 July 2023.

3. FAIR WORK COMMISSION CHANGES

From 1 July 2023, the application fee will increase to $83.30. The fee applies to dismissal, general protections, bullying, and sexual harassment at work applications made under sections 365, 372, 394, 773, and 789FC of the Fair Work Act 2009.

There is no fee to make an application to deal with a sexual harassment dispute under section 527F of the Fair Work Act.

Also effective from 1 July, the high-income threshold in unfair dismissal cases will increase to $167,500 and the compensation limit will be $83,750 for dismissals occurring on or after 1 July 2023.

4. PAID PARENTAL LEAVE CHANGES

From 1 July, amendments to the Paid Parental Leave Scheme will come into effect.

Notably, the Dad and Partner Pay (DAPP) scheme, which currently provides up to two weeks of paid leave, will now be combined with the 18-week paid parental leave scheme. This means eligible parent couples or single parents can share their 20 weeks of leave – aimed at greater gender equity in parental caring responsibilities.

There are other changes, too, such as the whole 20 weeks of leave of instalments can be received flexibly in multiple blocks within 24 months of the child’s birth or adoption date, removing the previous requirement of 12 weeks in one continuous period.

Also, note that employees now have greater rights to request an additional 12 months of leave (24 in total) – and employers need to show reasonable business grounds on which to refuse.

5. CHILDCARE SUBSIDIES

For those who employ parents with young children, it’s worth noting that childcare rebates will change from 1 July. They should result in any employees with a family income of less than $530,000 getting a higher level of subsidy for the cost of childcare.

For example, families earning up to $80,000 will get an increased maximum Child Care Subsidy (CCS) amount, from 85% to 90%. If they earn over $80,000, they may get a subsidy starting from 90%, but it will go down by 1% for each $5,000 of income the family earns.

While these changes are applied automatically, it is worth being aware that they are coming.

6. DOMESTIC VIOLENCE LEAVE INTRODUCED

From 1 February, employers with 15 or more employees were required to provide their employees with 10 days of paid family and domestic violence leave (FDVL) per year.

For smaller employers who employ less than 15 employees, this entitlement will operate from 1 August 2023.

Paid family and domestic violence leave is quite a sensitive topic, and there need to be procedures in place – on everything from how the HR or manager handles requests to the privacy issues around how it gets recorded on a pay slip.

7. PENSION AGE AND ELIGIBILITY INCREASES

For those businesses employing older Australians, it’s worth noting that from 1 July, the pension age will be raised to 67 for those born on or after 1 January 1957.

Not only that but asset and income eligibility tests will also be revamped, which means singles can earn $204 a fortnight and couples $360 a fortnight, before losing their full pension.

8. ENERGY BILL RELIEF ON ITS WAY

With soaring power bills contributing significantly to business operating costs, $650 in bill relief is on its way from July.

The total amount of bill relief will vary by state. To be eligible, your business must be on a separately metered business tariff with your electricity retailer – so if you run a business from home, you probably won’t qualify.

Certified Xero Bookkeepers

Notch Above Bookkeeping are Certified Xero bookkeepers offering agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero bookkeeping services below and get in touch today to discuss the plan which best suits the needs of your business.

payroll

Payday super proposed

/in /by

Superannuation system update in consultation

Following a media release in May, the Government announced that from 1 July 2026, employers will be required to pay super for their employees at the same time as their salary and wages.

The start date will provide employers, super funds, payroll providers and other parts of the superannuation system with sufficient time to prepare for the change. This is not yet law.

Treasury and the ATO will consult closely with industry and stakeholders on these changes in the second half of 2023. This measure is aimed at closing the gap on billions of dollars in unpaid super.

The upside for small business is the bank account better reflecting the actual cash flow position. With most accounting software packages heavy lifting the additional administration required, employers who outsource their payroll will face additional compliance costs.

For more information, see the Hon Stephen Jones MP joint media release here or contact our team at Notch Above.

Certified Xero Bookkeepers

Notch Above Bookkeeping are Certified Xero bookkeepers and feature agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero bookkeeping services below and get in touch today to discuss the plan which best suits the needs of your business.

payroll

Super guarantee rate change scheduled

/in /by

Get ready for a change in the super guarantee rate

The superannuation guarantee (SG) rate will increase from 10.5% to 11% on 1 July 2023.

Employers, remember to update your payroll system to align with these changes.

The new SG rate applies to payments made to workers on or after 1 July 2023.

The Superannuation Guarantee is a compulsory scheme that requires employers to provide a minimum level of superannuation support to their eligible employees.

Under this scheme, employers are required to make regular contributions to a complying superannuation fund or retirement savings account (RSA) on behalf of their employees. The current rate of SG contribution is set at 10% of an employee’s ordinary time earnings, with some exceptions for certain employees such as those under 18 years of age or earning less than $450 in a month.

The aim of the SG scheme is to help save for retirement and reduce reliance on the age pension. It also helps to ensure that employees are provided with a level of superannuation support throughout their working life, regardless of their employer or industry.

It is important to note that the SG scheme is separate from any additional voluntary contributions that an employee may choose to make to their superannuation account.

  • Refer to the ATO’s Super Guarantee Percentage table here »

Notch Above Bookkeeping are certified Xero bookkeepers and feature agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero payroll services below and get in touch today to discuss which plan best suits the needs of your business.

hiring

10 Tips on Onboarding Remote Employees

/in /by

Onboarding Remote Employees

We’re seeing more businesses engage REMOTE employees and subcontractors as they try to attract the best talent, regardless of location.

Remote employment presents challenges, including ONBOARDING, which means helping employees quickly become comfortable, engaged and productive.

Here are tips on making the onboarding process a success.

1. Plan for IT needs well in advance

Employees cannot work effectively without secure access to business applications and company-supplied hardware. In addition, to set up, help may be needed on home-networking issues and explaining security protocols. Make sure this doesn’t create delays.

2. Be clear on the job description and work rules

This sounds obvious but, unlike office employees, enforcing rules and policies is more difficult. Working hours, roles, reporting lines, timelines, meeting schedules and travel protocols are just a few things which can become confusing. Flexibility may be appropriate… but it’s still essential to have clear ground rules in place.

3. Take an interest in the remote workspace setup

Some Employees have been working from home for years and are effective in a home environment. Others are novices and need a lot of guidance. The employer should ensure they have the necessary facilities like a desk, chair, laptop, phone and specialised gear, (like a noise-canceling headset), dependable internet and, possibly, a separate phone line. Develop policies around providing these to remote employees OR offering a stipend.

4. Assign a buddy

The buddy or mentor system can create a sense of belonging. It also facilitates meaningful introductions to co-workers, supervisors and managers (more than giving a list or link to a company org. chart).

5. Be aware of local employment regulations

Remote employees may operate in jurisdictions which determine withholding tax based on gross earnings, filing status, number of exemptions and pay frequency. Be aware of these rules as well as any other employer obligations like covering employee expenses arising from the discharge of their duties.

6. Stage the onboarding process

Avoid information overload. Complete onboarding in short, easy-to-digest sessions so that other important tasks don’t get neglected. Allow the remote employees time for questions as they work through onboarding.

7. Provide early exposure to development opportunities

Employers should offer professional development options which are appealing to employees – including remote employees. Make these available early so remote employees think long term about their employment future.

8. Provide a remote employee handbook

It’s worth investing in a comprehensive but simple document which anticipates remote employees’ questions and concerns. This can be shared once the contract is signed and forms part of the agenda for early meetings with the remote employee. At the very least, Frequently Asked Questions will give the remote employee confidence while saving the time of managers who need to respond.

9. Encourage collaboration

Remote employees may not be comfortable reaching out through existing channels. A buddy can help with this as can periodic team-building activities. Leaders have an important role in making team members comfortable and this may involve meeting one to one to better understand the personalities involved.

10. Happy teams are successful teams!!

Setting clear goals, good project management, clarity on roles, decisive leadership and clear communication usually leads to success in business. Teams thrive in this environment and focus on the successes versus challenges. This is especially the case for remote workers who may miss out on office activities.

In summary, work doubly hard to lay a foundation for the success of your remote employees. This initial energy and investment will yield positive long-term results.  Prepare well, document your approach and be patient!

payroll

Expanding Single Touch Payroll Phase 2

/in /by

Single Touch Payroll Phase 2

Streamlined reporting information about employees to government agencies.

What is Single Touch Payroll Phase 2?

In the 2019–20 Budget, the government announced that Single Touch Payroll (STP) would be expanded to include additional information.

The expansion of STP, also known as STP Phase 2, reduces the reporting burden for employers who need to report information about their employees to multiple government agencies. It helps Services Australia’s customers, who may be your employees, get the right payment at the right time.

Flexible approach to STP Phase 2

To support employers, the approach to STP Phase 2 is flexible, reasonable and pragmatic based on your business readiness and individual circumstances.

Digital service providers (DSPs) who need more time to make the changes and update their solutions to support STP 2 can apply for a deferral for their customers. If your DSP has a deferral, they will let you know.

If you can start reporting by your DSP’s deferral date, you don’t need to apply for more time.

Requesting more time to transition

If you need more time to transition to STP Phase 2 reporting, you can:

  • apply for more time past your DSP’s deferral date
  • have your registered agent apply for more time on your behalf.

For more information about applying for a delayed transition, see STP expansion (Phase 2) delayed transitions.

There won’t be penalties for genuine mistakes in your first year of STP Phase 2 reporting.

Benefits of STP Phase 2

Benefits for employers
  • STP Phase 2 information will be used to streamline employer interactions
  • Payroll information you report will also be shared in near real-time with Services Australia. They’ll use it to streamline requests
  • You may no longer need to provide separation certificates when your employees leave — the date and reason an employee leaves will be in your STP report
  • You can also voluntarily report child support deductions or garnishees (or both) through STP — this reduces the need to send separate remittance advices to the Child Support Registrar.
Benefits for employees

Some changes under Phase 2 help streamline interactions for employees, such as:

  • Making it easier for employees at tax time now with better visibility of the types of income received and where it should be pre-filled on their individual income tax return
  • Over time, the new information reported will allow the ATO to tell employees if they’ve provided you with incorrect information that may lead to them getting a tax bill
  • STP information will also be shared with Services Australia so they can streamline interactions with their customers.

What isn’t changing

While you’ll need to report additional information in your STP report, there are many things that will stay the same, such as:

  • the way you lodge
  • the due date
  • the types of payments that are needed
  • tax and super obligations
  • end-of-year finalisation requirements.

Most of the additional information you need to report should already be captured in your current payroll software.

Certified Xero Bookkeepers

Notch Above Bookkeeping are Certified Xero bookkeepers and feature agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero bookkeeping services below and get in touch today to discuss the plan which best suits the needs of your business.

Related reading

STP Phase 2 reporting