Question: When does a company need a registration for working holiday makers?

Answer: A company needs a registration for working holiday makers if they employ or plan to employ workers who hold a Working Holiday visa (subclass 417) or Work and Holiday visa (subclass 462).

Question: Is there a best time to get this registration?

Answer: The best time to get the registration is before making the first payment to the employees.

Question: Do you need any other registration to be qualified for registering into working holiday makers?

Answer: Yes. The company must be registered for PAYG (pay as you go) withholding.

Question: What are the tax rates for working holiday makers?

Answer: The company must withhold tax for them at the rate of 15% up to an income level of $45000, 32.5% for income over $45000 to $120000, 37% for income over $120000 to $180000, and 45% for income over $180000.

Question: What is the tax rate if the employee does not have a TFN?

Answer: If the employee does not provide a TFN, the employer must withhold at 45% of total payments.

Question: Is there any penalty for failing to register?

Answer: Yes, penalties may apply for failing to register as a working holiday maker employer.

Question: Can the employer cancel the registration?

Answer: Yes, you can cancel your working holiday maker employer registration by phoning us on 132866.

Question: Can working holiday makers claim tax offsets?

Answer: Working holiday makers cannot claim tax offsets. If they have claimed a tax offset on the Tax file number declaration, do not adjust the amount you withhold.

Question: Can they apply for HELP, VSL, FS, SSL, and TSL?

Answer: Working holiday makers cannot have a Higher Education Loan Program (HELP), VET Student Loan (VSL), Financial Supplement (FS), Student Start-up Loan (SSL), or Trade Support Loan (TSL) debt.

Question: Can they receive any payments from extra payments from the Government?

Answer: Working holiday makers cannot receive Community Development Employment Projects (CDEP) payments or Lump sum A, B, or D payments.

Question: What is an Electronic Service Address?

Answer: An Electronic Service Address, or ESA, works as a mailbox for messages for your SuperStream. This generally takes the form of a URL or IP address, like the address used to access a website or computer.

Question: Is an email work as an ESA?

Answer: No, an email address is not a valid ESA.

Question: Why do you need ESA?

Answer: It ensures you meet all technical requirements for interacting electronically across the super network.

Question: When do you need ESA?

Answer: If you have a self-managed super fund (SMSF), you need an electronic service address (ESA) to receive SuperStream data.

Question: What is SuperStream?

Answer: SuperStream is the way all employers are required to pay contributions and send information to super funds. With SuperStream, you pay the super contributions for your employees via electronic funds transfer or BPAY and send the associated data electronically.

Question: Where can we get ESA?

Answer: You can get an ESA from an SMSF messaging provider or through your SMSF intermediary, such as SMSF administrator, tax agent, accountant, or some banks.

Question: Is there any cost involved?

Answer: Many of these options are no cost or low cost.

Question: Whom do you need to inform about your ESA?

Answer: Once the employees get ESA from their SMSF, they need to give the details to their employer or payroll department. If there are any changes, they need to notify the payroll department.

Question: How will employees register ESA if their SMSF doesn’t use an SMSF intermediary?

Answer: Employees will need to register ESA directly with an SMSF messaging provider if their SMSF doesn’t use an SMSF intermediary, such as an SMSF administrator, tax agent, accountant, or some banks.

Question: What will they provide to you?

Answer: Your SMSF messaging provider will give you the alias it uses as its active ESA.

Question: What are the benefits of using the alias?

Answer: The benefits of using the alias are: SMSF members can give it to their employer to help with paying super contributions to your fund through a clearing house. Employees can receive contribution messages your member’s employer sends to your SMSF using the SuperStream standard. It allows you to process rollovers to and from your member’s other funds using the SuperStream standard. You can receive and action certain release authorities faster via SuperStream – including the first home super saver (FHSS) scheme.

Question: Can you use ESA anywhere you need?

Answer: You can use ESA only if you have permission to do so from the SMSF messaging provider.

Question: Does ESA need to be active to receive messages?

Answer: Yes, your ESA needs to be active to receive messages for SMSF employer contributions.

Question: What will happen if ESA is not active?

Answer: If the ESA is not active or you do not have permission to use it, your employer may redirect your contributions to a stapled super fund, their default fund, and may ask you to complete a Superannuation standard choice form.

Question: How can you roll over funds into or out of your SMSF?

Answer: If you are requesting a rollover into or out of your SMSF, you are required to use SuperStream. You need to ensure that your chosen ESA is active and able to provide rollover SuperStream services.

Question: What will happen if ESA is not active for the rollover of funds into or out of your SMSF?

Answer: If the ESA is not active or you don’t have permission to use it, you will not be able to roll money into or out of your SMSF.

Question: What do we mean by the end of year payroll?

Answer: At the end of the payroll year (EOPY), we simply need to make sure we have paid our employees up to June 30 and finalized your STP payroll reporting with the ATO.

Question: What is the difference between employees and contractors?

Answer: Employees work in someone else’s business, and the employer controls how, where, and when they do their work, and pays them a wage, whereas contractors are running their own business, work for themselves, and are their own boss.

Question: What is Payroll?

Answer: Payroll can be described as the process of paying a company’s employees. It includes collecting the list of employees to be paid, tracking the hours worked, calculating the employee’s pay, distributing the salary on time, and recording the payroll expense.

Question: What methods do we use to manage payroll?

Answer: To manage payroll, we can do it ourselves manually, use payroll software like MYOB, XERO, Quickbooks, outsource payroll, or get assistance from professional expertise.

Question: What functions are involved in payroll?

Answer: Functions involved in Payroll involve balancing and reconciling payroll data, delivering pay runs and payslips, wage deductions, record-keeping and verifying the reliability of pay data, recording paperwork for new hires, editing existing employee files, calculating reimbursements, bonuses, overtime and holiday pay, depositing and reporting taxes, and maintaining compliance with tax laws.

Question: What employer-provided benefits do employees get?

Answer: An employer-provided benefit is a benefit an employer provides to, or on behalf of, an employee for the employee’s, or in some cases their family’s, private use. Employer-provided benefits include cars, school fees, private health insurance, low-interest loans, housing assistance, financial investments, and expense benefits. Some of the expense benefits are novated car leases, telephone expenses, holiday expenses, medical or hospital expenses, union dues/professional association membership fees, fuel and/or power expenses, including electricity, gas, oil, or firewood, entertainment, grocery bills, credit card accounts, sporting or social club fees, and child care expenses.

Question: What is a payroll system?

Answer: A payroll system is any means of paying employees, depositing employment taxes, and maintaining records of the transactions. These tasks can be done manually or they can be automated with software to save time and minimize the risk of error.

Question: Which payroll software do we use for businesses?

Answer: For medium to large businesses, we can use Xero, MYOB, Quickbooks, Microkeeper. For small businesses, we can use Easy Payslip, Keypay, Reckon One, Cloud Payroll Micropay, Sage Micropay.

Question: How to set up payroll for a small business?

Answer: There are a few steps involved in setting up payroll for a small business. Let us help you sleep better by taking care of your payroll! Just click on the following link to save money, time, and implement faster on Payroll.

Question: What do you need to do to pay a new employee?

Answer: Want to hire a new employee? Great! There’s a lot that goes into hiring. Our resource is going to walk you through all the steps you need to take, beginning with the most critical tasks, like making sure your business is properly set up to legally and effectively hire and pay an employee. Following this advice will ensure that you are prepared to start the hiring process and grow your business in exciting ways. Click on the following link to get you there.

Question: What are the common mistakes that happen during the Payroll process?

Answer: Common mistakes happen during the payroll process when we set up payroll incorrectly, pay or deduct more money to employees’ accounts, forget to record paper checks or any changes of pay rates or super account numbers, submit deposits late or incorrectly, ignore running payroll on time.

Question: How long to keep employee payment records?

Answer: We need to keep these records for five years. The five years start from when we prepared or obtained the records, completed the transactions or acts those records relate to, whichever is later.

Question: What is PAYG withholding tax?

Answer: When you make payments to employees, certain contractors, and other businesses, you need to withhold an amount from the payment and send it to the Australian Taxation Office (ATO). This is called PAYG withholding and works to prevent workers from having a large amount of tax to pay at the end of the financial year.

Question: What is PAYG instalment?

Answer: Pay as you go (PAYG) instalments are regular prepayments of the tax on your business and investment income. By paying regular instalments throughout the year, you should not have a large tax bill when you lodge your tax return.

Question: Differences between PAYG withholding tax and PAYG instalment tax? Answer: The main difference is that PAYG withholding tax is a pre-payment on behalf of your employees for their personal tax obligations, and PAYG instalment tax is on behalf of your business for its own corporate income tax obligations.

Question: How do we avoid payroll errors? Answer: To avoid payroll errors, we should ensure that all employee details are correct, track leave start and end dates, calculate holidays accrued at the end of employment, review your reporting process (e.g., filling up your annual reconciliation form), stay updated with changes and new rules in payroll tax rules, and meet payroll requirement deadlines (e.g., paying withholding, providing payment summaries to employees).

Question: What is Payroll Tax? Answer: Payroll tax is a state or territory tax. It is calculated on the total wages you pay each month, and it is collected by the state or territory where your employees are located.

Question: Do all businesses need to pay payroll tax? Answer: Not all businesses have to pay payroll tax. You are required to pay when your total Australian wages exceed the tax-free threshold for the relevant state or territory. Thresholds and tax rates vary between states and territories.

Question: What is an employment termination payment? Answer: An employment termination payment (ETP) refers to lump sum payments received when leaving work or changing jobs. The tax you pay on these lump sum amounts is different from the tax you pay on your regular income. An ETP may include payments for unused sick leave, unused rostered days off, payments in lieu of notice, gratuities or ‘golden handshakes’, and invalidity payments for permanent disability.

Question: Is there any tax on ETP? Answer: There is usually a lower rate of tax on ETP if you receive the payment within 12 months of the termination period.

Question: Does an employee get any other payments than ETP? Answer: Yes, employees may receive lump sum payments for unused annual or long service leave, or the tax-free part of a genuine redundancy or early retirement scheme. These payments are not part of your ETP, but you may still pay tax on these amounts at a concessional rate.

Question: Can you roll over your ETP to your super? Answer: No, you cannot roll over your ETP to your superannuation.

Question: Will you get more than one income statement after your redundancy? Answer: You will receive one or more income statements or payment summaries that show the amounts you receive and the tax withheld.

Question: Where do you need to use information from payment summaries? Answer: You need to use the information from payment summaries to complete your income tax return.

Question: What is superannuation? Answer: Superannuation, or ‘super’, is money put aside by your employer over your working life for you to live on when you retire from work.

Question: Why is super important? Answer: Super is important because the more you save, the more money you will have for your retirement.

Question: Can you withdraw your super money anytime you want? Answer: No, you can only withdraw your super money in certain circumstances, such as when you retire or turn 65 years old.

Question: How do I save super? Answer: Your employer makes contributions into a super account for you, known as the ‘super guarantee’. These contributions are in addition to your salary and wages, and there are legal requirements about the amount your employer must pay.

Question: What is the rule for under 18 age employees for super contributions? Answer: If you’re under 18, you need to work more than 30 hours in a week to be eligible for super contributions.

Question: Which employment status is eligible to get super? Answer: All employment statuses, including casual, part-time, full-time, and temporary residents, are eligible to receive super contributions. Some contractors who are paid primarily for labor may also be eligible.

Question: What is the super guarantee rate? Answer: The super guarantee rate is 10.5% for this financial year (July 2022 to June 2023). It will be 11% from July 2023.

Question: How do I increase my super? Answer: You can add to your super by making your own contributions. You may be able to ‘salary sacrifice’ to super from your before-tax income or contribute to super from your after-tax income.

Question: What is salary sacrificing? Answer: A salary sacrifice arrangement is when you agree to receive less take-home income from your employer in return for benefits. These benefits are paid out of your pre-tax salary.

Question: What benefits can you access through salary sacrificing? Answer: The benefits can include goods and services like a car or laptop, or voluntary contributions to your superannuation.

Question: What is Fringe Benefit Tax? Answer: A fringe benefit is a payment made to an employee that is not their salary or wages. These benefits are subject to fringe benefits tax (FBT), which is separate from income tax and calculated based on the taxable value of the fringe benefit.

Question: Why does a company offer fringe benefits? Answer: Companies offer fringe benefits to attract and retain high-quality employees and gain a competitive edge in recruitment. These benefits can be extended to the employee’s spouse or children as well.

Question: Can employers benefit from FBT? Answer: Employers can generally claim the cost of providing fringe benefits and the amount of FBT paid as income tax deductions.

Question: What are examples of fringe benefits? Answer: Common fringe benefits include using a work vehicle for private purposes, paying for an employee’s gym membership or private health insurance, offering free concert tickets, reimbursing school fees and childcare costs, and providing discounted loans.

Question: What is the benefit of salary sacrificing? Answer: Fringe benefits can also be provided through a salary sacrifice arrangement, which may additionally benefit the employee by lowering their tax liability.

Question: What is not considered a fringe benefit? Answer: The Australian Taxation Office (ATO) does not consider an employee’s salary, employer contributions to a super fund, termination payments, or shares purchased through a share acquisition scheme to be fringe benefits. Dividends, benefits provided to volunteers or contractors, and certain benefits from religious institutions are also not considered fringe benefits.

Question: Are there any benefits that are better than others? Answer: A major reform being considered by the Federal Government is to make many electric vehicles provided through a business arrangement exempt from Fringe Benefits Tax, even if they have no business usage.

Question: What is Reportable Fringe Benefits Amount (RFBA)? Answer: When the taxable value of fringe benefits paid to an employee in an FBT year exceeds $2000, then it is considered a Reportable Fringe Benefit Amount (RFBA). This amount must be reported on the employee’s end-of-financial-year income statement or payment summary.

Question: How is FBT calculated? Answer: Fringe benefits tax is calculated based on the highest tax bracket regardless of the employee’s actual tax bracket. For more information, contact one of our specialists.

Question: What is workers compensation? Answer: Workers compensation is insurance payment to employees if they are injured at work or become sick due to their work. It covers wages, medical expenses, and rehabilitation.

Question: What is NES? What are NES entitlements? Answer: NES stands for National Employment Standards. The 11 minimum entitlements of the NES are maximum weekly hours, requests for flexible working arrangements, offers and requests to convert from casual to permanent employment, parental leave and related entitlements, annual leave, personal/carer’s leave, compassionate leave, family and domestic violence leave, community service leave, long service leave, public holidays, and notice of termination and redundancy pay.

Question: Who does the NES cover? Answer: All employees in the national workplace relations system are covered by the NES, regardless of the award, registered agreement, or employment contract that applies.

Question: If automated super payments return to the fund for failed payment, what should we do? Answer: Regarding the return, please contact the super fund directly. To re-process this payment, you have two options: process the payment directly to the fund or process the payment in a new Auto Super batch.

Question: What is TFN? Answer: A Tax File Number (TFN) is your personal reference number in the tax and superannuation systems.

Question: How to apply for a TFN? Answer: You can apply for a TFN either online or by paper, depending on your circumstances and residency status. The application is free. For more details, contact us.

Question: What is an ABN? Answer: An Australian Business Number (ABN) is an eleven-digit number that all businesses must obtain. It identifies the business and is used in commercial transactions and dealings with the Australian Taxation Office (ATO).

Question: What is an ACN? Answer: An Australian Company Number (ACN) is a nine-digit number that only companies receive. The ACN is issued by the Australian Securities and Investments Commission (ASIC). It is used for company identification and monitoring purposes.

Question: What is Pre-tax deductions? Answer: Pre-tax deductions are amounts taken from an employee’s gross pay before taxes are withheld. These deductions reduce the employee’s taxable income.

Question: List down pre-tax deductions? Answer: Pre-tax deductions include Healthcare Insurance, Health Savings Accounts, Supplemental Insurance Coverage, Short-Term Disability, Long-Term Disability, Dental Insurance, Child Care Expenses, Medical Expenses, Flexible Spending Accounts, Life Insurance, Commuter Benefits, Retirement Funds, Tax-Deferred Investments, Vision Benefits, and Parking Permits.

Question: Are Pre-Tax Deductions Good? Answer: Pre-tax deductions are generally beneficial for both employees and employers. Employees can access coverage and benefits like medical care and life insurance with a reduced taxable income, which often saves them money over time. Employers may also benefit by reducing their tax obligations related to FUTA, FICA, and SUI.

Question: Do Pre-Tax Deductions Reduce Taxable Income? Answer: Yes, pre-tax deductions typically reduce taxable income for employees. Since the deductions are taken before taxes are withheld, they effectively lower the employee’s taxable income. However, they may not affect the employer’s tax obligations.

Question: What is Post-tax deductions? Answer: Post-tax deductions are taken from an employee’s paycheck after all required taxes have been withheld. These deductions reduce the employee’s net pay rather than their gross pay and don’t directly affect the individual’s overall tax burden.

Question: What is the maximum super contribution base? Answer: The maximum super contribution for the year 2022-2023 is $60,220, and for the year 2023-24, it is $62,270.

Question: What are the important steps we should take in the End of Year reconciliations for Payroll? Answer: When you reconcile your employee’s payroll, ensure that your payroll records accurately reflect wages and hours, confirm the accuracy of deductions made from each pay, update the general ledger to reflect wages and deductions, run payroll tax reports before making periodic payments, and prepare and reconcile payroll tax forms at the end of the financial year.

Question: How does Payroll Australia process payroll? Answer: Payroll Australia utilizes software like QuickBooks (QB), Xero, MYOB, and Microsoft to process payroll efficiently and accurately.

Question: What is the current payroll tax rate and maximum threshold?

Question: How to calculate payroll tax in NSW? Answer: Contact one of our specialists for assistance with calculating payroll tax in NSW.

Question: What is Chart of Accounts? Answer: A chart of accounts (COA) is a list of all the accounts you must use to record financial transactions in your general ledger. It helps you keep track of where money comes from and goes. It is integral to your bookkeeping, accounting, and financial reporting. They’re like a map that helps you categorize your transactions correctly and group similar accounts together for reporting.

Question: How many years of payroll experience does Payroll Australia have? Answer: Payroll Australia has more than 10 years of experience. For more details, talk to one of our specialists.

Question: What industry do we have expertise in? Answer: We specialize in Payroll. We provide fast, easy, accurate payroll and tax services that can help you save time and money. We are committed to following Australian Payroll Compliance.

Question: What are the advantages of using payroll software? Answer: Using payroll software provides businesses with time and cost savings by automating payroll processes and reducing manual calculations. It ensures accuracy and compliance with tax laws and regulations, minimizing errors and potential penalties. Additionally, payroll software improves efficiency, productivity, and data reporting capabilities, enabling businesses to streamline workflows and make informed decisions.

Question: What are the positive aspects of utilizing payroll software? Answer: Payroll software offers several positive aspects, including time and cost savings through automation and reduced manual calculations. It ensures accuracy and compliance with tax laws and regulations, minimizing errors and penalties. Additionally, it enhances efficiency, productivity, and reporting capabilities, enabling businesses to streamline workflows and make informed decisions.

Question: What are the perks of incorporating payroll software into your operations? Answer: Utilizing payroll software provides businesses with time and cost savings through automation and reduced manual calculations, while ensuring accuracy and compliance with tax laws and regulations. It also enhances efficiency, productivity, and reporting capabilities, enabling businesses to streamline workflows and make informed decisions.

Question: What are the benefits associated with the use of payroll software? Answer: The benefits of using payroll software include time and cost savings through automation and reduced manual calculations, improved accuracy and compliance with tax laws, enhanced efficiency, productivity, and reporting capabilities, and streamlined workflows for informed decision-making.

Question: How can payroll software be advantageous for businesses? Answer: Payroll software is advantageous for businesses as it automates payroll processes, saving time and reducing costs. It also ensures accuracy, compliance with tax laws, and improves efficiency, productivity, and reporting capabilities for informed decision-making.

Question: In what ways does payroll software provide benefits for organizations? Answer: Payroll software benefits organizations by automating payroll processes, saving time and reducing costs. It also ensures accuracy, compliance with tax laws, and enhances efficiency, productivity, and reporting capabilities for informed decision-making.

Question: What are the long service leave entitlements in NSW? Answer: In NSW, under the Long Service Leave Act 1955, employees are eligible for two months (or 8.67 weeks) of additional paid leave after working with the same employer for ten years. Any public holidays that occur during the leave period will extend the employee’s period of leave. Employees can also receive a pro-rata entitlement after five years of service under certain circumstances.

Question: What are the long service leave entitlements in Victoria? Answer: In Victoria, under the Long Service Leave Act 2018, employees are entitled to take long service leave after seven years of continuous employment with one employer. The amount of leave is proportional to the employee’s years of service and is calculated based on a specific formula.

Question: What are the long service leave entitlements in Queensland? Answer: In Queensland, under the Long Service Leave Act 2016, employees are entitled to 8.67 weeks of paid leave after ten years of continuous service with the same employer. Additional leave is accrued for the next five years of service, and after fifteen years of continuous employment, employees can access their accrued long service leave.

Question: What are the long service leave entitlements in South Australia? Answer: In South Australia, under the Long Service Leave Act 1987, employees are entitled to 13 weeks of long service leave after 10 years of continuous service with the same or related employers. Additional leave is accrued for every subsequent year.

Question: What are the long service leave entitlements in Western Australia? Answer: In Western Australia, under the Long Service Leave Act 1958, employees with over 10 years of service are entitled to 8.67 weeks of paid long service leave. Additional leave is accrued for every five years of service.

Question: What are the long service leave entitlements in Northern Territory? Answer: In the Northern Territory, under the Long Service Leave Act 1981, employees are eligible for 13 weeks of long service leave after 10 years of continuous service. Additional leave is accrued for every five years of service.

Question: What are the long service leave entitlements in Australian Capital Territory (ACT)? Answer: In the Australian Capital Territory (ACT), long service leave entitlements are covered by the Long Service Leave Act 1976. Employees are entitled to 6.0667 weeks of paid long service leave after seven years of continuous service. Additional leave accrual occurs at a specific rate.

Question: What are the long service leave entitlements in Tasmania? Answer: In Tasmania, under the Long Service Leave Act 1976, employees are entitled to 8.66 weeks of long service leave after 10 years of continuous service. Additional leave is accrued for every five years of service.

Question: What is an employment termination payment? Answer: An employment termination payment is a compensation package provided to an employee upon the termination of their employment, typically including severance pay, accrued leave payments, and other entitlements.

Question: What are the list of Industry Super Funds in Australia? Answer: Some of the Industry Super Funds in Australia include AustralianSuper, Cbus, Hostplus, HESTA, REST, Sunsuper, CareSuper, MTAA Super, LUCRF Super, Media Super, Energy Super, and many others.

Question: What is ACH (Automated Clearing House)? Answer: ACH (Automated Clearing House) is an electronic payment system in the United States that enables secure and efficient fund transfers between banks and financial institutions.

Question: What is Base pay rate? Answer: The base pay rate refers to the fixed amount of money an employee receives for their work before any additional factors or bonuses are considered.

Question: What is Deduction? Answer: A deduction is an amount of money withheld or subtracted from an employee’s wages or salary, often for taxes, insurance premiums, or retirement contributions.

Question: What is EFTPS? Answer: EFTPS stands for Electronic Federal Tax Payment System. It is a free service provided by the U.S. Department of the Treasury that allows individuals and businesses to make federal tax payments electronically.

Question: What is Employee’s Withholding Allowance Certificate (W-4)? Answer: The Employee’s Withholding Allowance Certificate (W-4) is a tax form used in the United States to determine the amount of federal income tax to be withheld from an employee’s paycheck.

Question: What is Exempt? Answer: “Exempt” refers to a status granted to individuals that exempts them from certain obligations or requirements, often for tax purposes.

Question: What is FICA? Answer: FICA (Federal Insurance Contributions Act) is the formal name for the combination of Social Security and Medicare Taxes.

Question: What is Garnishment? Answer: Garnishment is a legal process where a portion of an individual’s wages or assets is withheld by an employer or financial institution to satisfy a debt owed to a creditor.

Question: What is General Ledger? Answer: A general ledger is a central accounting record that contains all the financial transactions and balances of a business.

Question: What is Gross pay? Answer: Gross pay refers to the total amount of compensation an employee earns before any deductions or taxes are subtracted.

Question: What is Income Tax? Answer: Income tax is a tax imposed by the government on the income earned by individuals, businesses, and other entities.

Question: What is Net pay? Answer: Net pay, also known as take-home pay or net income, refers to the amount of money an employee receives after all deductions have been subtracted from their gross pay.

Question: What is Social Security (OASDI)? Answer: Social Security (OASDI) is both an employee withholding tax and an employer payroll tax that supports the Social Security program in the United States.

Question: What is Take-home pay? Answer: Take-home pay refers to the employee’s wages that remain after all deductions and taxes are taken out.

Question: What is Salary sacrificing super? Answer: Salary sacrificing super is a voluntary arrangement where an employee agrees to redirect a portion of their pre-tax salary into their superannuation (retirement savings) account.

Question: What is (PAYG) withholding tax? Answer: PAYG (Pay As You Go) withholding tax is an Australian system where employers deduct a portion of an employee’s wages to meet their income tax liabilities.

Question: What’s the difference between salary and a salary package? Answer: A salary represents the fixed amount of money paid to an employee for their work, while a salary package includes the base salary along with additional benefits and allowances.

Question: What factors do employers use to determine what salary to pay for a role? Answer: Employers consider factors such as job market conditions, candidate qualifications, experience, responsibilities, budget, and industry standards when determining the salary for a role.

Question: How do I weigh up the salary offer? Answer: When evaluating a salary offer, consider factors like market rates, benefits, career growth, and personal financial goals to make an informed decision.

Question: What is Single Touch Payroll? Answer: Single Touch Payroll (STP) is an ATO initiative that requires employers to digitally report payroll details to the ATO each time they pay their employees.

Question: How has the legislation recently changed? Answer: Legislation now mandates all employers in Australia to adopt a compliant payroll solution, often software-based, for reporting payroll details to the ATO with every pay run.

Question: What does it mean for me as an employer? Answer: Employers need to digitally report payroll details to the ATO with every pay run, ensuring compliance with the new legislation.

Question: Can I start filing STP before it is mandatory for me? Answer: Yes, you can start filing STP reports before it becomes mandatory for your business.

Question: How do I install STP? Answer: STP is available on Xero plans that include payroll. Follow the steps to set up and opt in to STP for streamlined reporting.

Question: Who should opt in? Me, my accountant or bookkeeper? Answer: Anyone who will be filing STP reports should opt in, whether it’s you, your accountant, or bookkeeper.

Question: How do I get a software ID (SSID) and connect to the ATO? Answer: Xero provides the necessary details to connect to the ATO for STP reporting.

Question: What information is sent with STP? Answer: STP sends payment, tax, and super information to the ATO with each pay run.

Question: Do FBT, ETP, and RESC need to be reported via STP? Answer: Yes, various payroll components including ETP and RESC are reported through STP.

Question: Do I need to do payment summaries anymore? Answer: With STP, there’s no need for traditional payment summaries. Instead, a simple end-of-year process confirms reporting.

Question: What happens if I make a mistake? Answer: If a mistake is made in a pay run filed with STP, corrections can be made using different options.

Question: Will I need to file part year information if I don’t start STP at the beginning of the financial year? Answer: No, STP files financial year-to-date payroll information from the point you opted for STP.

Question: What is Redundancy pay? Answer: Redundancy pay is a compensation paid to employees upon termination of their employment due to redundancy, typically including a certain amount of their ordinary pay.