Monthly Archives: October 2017

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Single touch payroll reporting

Single touch payroll (STP) is a reporting framework for “substantial employers” to provide payroll and superannuation information to the Commissioner at a time earlier than that which applies under the ordinary provisions. Entities that are not substantial employers can voluntarily apply STP. Entities that report to the Commissioner using STP will not have to comply with some other reporting obligations. STP relies on the use by employers of SBR enabled software. The main STP reporting provisions are contained in TAA Div 389.
As part of the introduction of STP reporting, changes were also made to the SGAA, the TAA, the ITAA36, and the SISA to allow the ATO and employers to streamline the completion of superannuation choice forms and TFN declarations using the Commissioner’s on-line service. ITAA36 was also amended to improve the Commissioner’s ability to validate TFN information.

 

Substantial employer

Subject to the exemptions below, an entity is a substantial employer at a given point in time if, on the most recent 1 April occurring before that time, the entity had 20 or more employees or was a member of a wholly-owned group that had 20 or more employees (s 389-5(6)).
According to the explanatory memorandum, the number of employees is calculated on a head count basis (rather than full-time equivalency) and the ordinary definition of employee is to be used, so contractors are not included in the head count.
Entities that are not substantial employers may choose to apply STP reporting (s 389-15).

 

 

Application

Despite being a substantial employer at a particular time, a substantial employer is only required to notify the Commissioner using STP reporting if the requirement to notify occurs on or after the later of the following (item 22(1) of Schedule 23 to the Omnibus Act):
a) The “application day” as determined by the Commissioner under a legislative instrument (such day must be later than 1 July 2018). At the time of writing, no such instrument had been made, or
b) Where no application day has been determined:
i. 1 July 2018 if the entity was a substantial employer before that time, otherwise
ii. The first 1 July that occurs after the entity becomes a substantial employer.
Once an entity has become a substantial employer, the employer must continue to use STP reporting, even if the number of employees falls below 20, unless the Commissioner grants the employer an exemption

 

Exemptions

By legislative instrument, the Commissioner can grant exemptions from STP reporting on a class basis. This exemption can be limited to the extent specified in the instrument. At the time of writing, no such instrument has been made.
The Commissioner can also exempt individual entities by written notice to the entity. The exemption can be limited to the extent specified in the notice. The exemption can be as a result of an application by the entity or on the Commissioner’s own volition. Where the entity has applied for an exemption, the Commissioner must notify the entity if the application is refused and there is a deemed refusal if the Commissioner does not notify the entity within 60 days of the application being made. The entity can object in the usual way against a refused application or the Commissioner’s decision to limit the exemption.
According to the explanatory memorandum, the exemption powers can be used by the Commissioner to manage the migration to STP reporting and allow the Commissioner to consider a wide range of circumstances.

 

Withholding payments covered

The withholding payments (including nil amounts) covered by STP are:

  • A payment that constitutes an employee’s ordinary time earnings or salary or wages (within the meaning of the SGAA) — this excludes contractors, and
  • The following payments:

– under the Seasonal Labour Mobility Program (¶26-275)
– for work and services (¶26-150), with the exception of payments under voluntary agreements, labour hire arrangements, and those prescribed by regulations
– for termination of employment (¶26-180)
– for unused leave (¶26-180)
– for parental leave pay (¶26-190), and
– for dad and partner pay (¶26-190).
The Commissioner may determine additional withholding payments by legislative instrument. At the time of writing, no such instrument had been made.
Reportable employer superannuation contribution (RESC) and reportable fringe benefit (RFB) amounts are not required to be reported using STP reporting. However, an entity may nonetheless choose to report these amounts to the Commissioner using STP reporting by 14 July (s 389-15(3)).

 

 

Timing of reporting

Payments that constitute an employee’s ordinary time earnings or salary or wages must be notified to the Commissioner on or before the day on which the amount is paid. All other amounts must be notified to the Commissioner on or before the day by which the PAYG withholding amount is required to be withheld from the payment (regardless of whether the withholding has been made by that time).

 

 

Method of reporting

Under STP reporting, substantial employers must report information to the Commissioner in the approved form (s 389-5(2)). The approved form has not yet been released by the Commissioner, but a design process in currently underway. It is anticipated that the approved form will be produced by SBR-enabled software.
The approved form can only cover the withholding payments covered by STP reporting. Failure to use the approved form would render the employer liable to a failure to lodge penalty under TAA Div 286.

 

Transitional arrangements

A substantial employer is not subject to a penalty under TAA Div 286 if:

  • the employer has not voluntarily chosen to apply STP reporting
  • the entity does not use STP reporting to notify the Commissioner of the withholding payments (other than any additional payments that the Commissioner has specified by legislative instrument)
  • the failure to use STP reporting occurs in the first 12 months after the entity’s application day, and
  • during that 12-month period, the Commissioner has not notified the entity in writing that:
  • related to an earlier failure by the entity to use STP reporting, and
  • advised the entity that a subsequent failure to use STP reporting may result in an administrative penalty.

The Commissioner can also allow entities with an ongoing grace period for correcting false or misleading statements made in STP reports without penalty. This could, for example, allow errors made in one STP report to be corrected in a subsequent STP report. However, such corrections need to be made within 14 days after the end of the financial year to which they relate.
According to the explanatory memorandum, there is no government decision at this stage to extend the regime on a mandatory basis to employers with less than 20 employees.
Further information on the consultation and design process and STP reporting in general can be found on the ATO website (www.ato.gov.au/about-ato/about-us/in-detail/strategic-direction/streamlined-reporting-with-single-touch-payroll/?=redirected).

 

The source of this content is CCH‘s professional information services. Thompsons Australia has a professional subscription with CCH providing access to in-depth quality technical information and commentary used by Thompsons Australia in keeping staff and clients currently in formed.

Checklist: 2016/17 year end — allowable deductions for ADF members

Use this checklist to determine your eligibility for the most common work-related tax deductions for members of the Australian Defence Force.

 

name:
Year ending: Date:

 

2016/17 year end — allowable deductions for Australian Defence Force members Yes No Ref
D1 Car-related expenses (work-related daily travel expenses)
Do you travel between two work sites?
Number of kilometres: __________________
Do you travel for work?
Number of kilometres: __________________
Do you travel between home and work carrying bulky equipment or bulky items for sale?
Number of kilometres: __________________
You can only claim this if you don’t have locked storage at work.
Do you travel for reasons relating to Extra Regimental Duties?
Number of kilometres: ____________ Type of ERD: ____________
All log books from before 1 July 2012 will need to be updated for the current tax year.
All cents per kilometre method claims are at a rate of 66 cents per kilometre.
You cannot claim:
a deduction just because you receive a Vehicle allowance
a trip consisting of home-work-home
travel between work and home more than once a day
trips if you are on call (unless your duties are considered to commence upon receiving the call), and
trips outside normal business hours.
D3 Clothing expenses
Do you wear clothing to protect yourself from the risk of illness or injury posed from your working environment?
Cost of sunglasses or hats: ____________
Cost of safety-coloured clothing: ____________
Cost of steel-capped boots: ____________
Are you required to pay for your compulsory military uniform?
If “Yes”, list the cost: __________________
List the type and cost of additional clothing specifically related to your duties (ie spares):
______________________________
Did you pay for or need to repair ceremonial items of your uniform (ie medal mounting)
If “Yes”, list the cost: __________________
Have you incurred laundry and dry-cleaning expenses for any of the above items?
If “Yes”, list the cost: __________________
Tip
You can have clothing expenses from prior years, and laundry expenses for such clothing this year.
You cannot claim:
purchasing and cleaning of:
plain uniforms or conventional clothing (even if purchased from the ADF)
sports clothing
clothing worn for medical reasons
everyday footwear (ie dress or casual shoes)
items that were purchased or reimbursed by your employer, and
a deduction just because you received a clothing, uniform and laundry allowance.
D4 Self-education expenses
Did you undertake a course of study designed to lead to an increase in income from your current employment? Or a course likely to lead to your next promotion?
If “Yes”, list the details:
Type of course of study: ____________________________________
Educational facility: ____________________________________
Cost of course fees: ____________________________________
Cost of textbooks: ____________________________________
Cost of stationery: ____________________________________
Cost of equipment/computers: ____________________________________
Cost of subscriptions: ____________________________________
Cost of travel from work: ____________________________________
Tip
You cannot claim a deduction just because you received an allowance, such as a Flying Allowance or a Language Proficiency Allowance.
You cannot claim a self-education course for the purposes of finding new employment or starting a new income-earning activity.
D5 Other out-of-pocket, work-related expenses
Did you pay professional association fees?
If “Yes”, list the cost: __________________
Did you pay fees for professional seminars, courses, conferences or workshops?
If “Yes”, list the cost: __________________
Did you pay for reference books, technical journals, or trade magazines?
If “Yes”, list the cost: __________________
Did you pay for safety items such as hard hats, safety glasses or sunscreen?
If “Yes”, list the cost: __________________
Your mess subscription (if you paid for one) should include amounts related to work activities and amounts related to entertainment and food?
List the cost relating to work activities: __________________
Did you use your personal telephone and/or internet service for work?
If “Yes”, what is the work-related percentage: ____________% and cost __________________
Do you have itemised phone bills?
If “Yes”, number of months: __________________
Do you have a four-week diary of calls made?
Did you pay for additional expenses relating to Extra Regimental Duties?
If “Yes”, list the cost: __________________
Did you pay for fitness costs, such as gym memberships?
If “Yes”, are you a member of Special Forces, or employed as a physical training instructor?
If “Yes”, list the cost: __________________
Did you pay for a timepiece with special characteristics (ie a stopwatch)? Or pay for repairs to it?
If “Yes”, list the cost: __________________
Did you pay for tools and equipment (under $300 each)?
If “Yes”, list the cost: __________________
Tools and equipment note
No immediate deduction is available for tools and equipment costing $300 or more. For items purchased between $300 and $1,000, they may be placed in a low value pool in Item D6 and depreciated so long as individual remains employed in the industry. Purchases over $1,000 to be depreciated of their effective life until its written down value is less than $1,000. Then it may enter the low value pool.
NB: All items only depreciable on work-related portion.
Tip
You cannot claim:
child care expenses
driver’s licence fees
attendance to social mess functions, even if function etiquette is learned.
haircuts
weight loss programs
meals during a normal working day
newspapers or online subscriptions
removal/relocation costs, even if you are transferred by your employer, and
rent or mortgage interest.
D9 Gifts or donations
Did you make any gifts or donations of $2 or more to a deductible gift recipient?
If “Yes”, list below:
____________________________________
____________________________________
____________________________________
____________________________________
Tip
Your receipt from the approved organisation will show whether your donation is tax-deductible.
You cannot claim time spent volunteering for an organisation.

 

The source of this content is CCH‘s professional information services. Thompsons Australia has a professional subscription with CCH providing access to in-depth quality technical information and commentary used by Thompsons Australia in keeping staff and clients currently in formed.