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Employee Obligations and Record-keeping


Employee Obligations and Record-keeping


During the budget for 2018-19 a lot of emphasis was placed on Employee Obligations, on how to ensure they are met and how to monitor them. A significant budget allocation was made for the ATO to achieve this goal.

One such Monitoring mechanism was Single Touch Payroll. Another was Employee Obligations Audit.

Below we take a quick look at the Main Areas to review:

  1. Superannuation:

    1. Super has to be paid if the monthly Gross is $ 450 or above.
    2. Super has to be paid for Directors and Contractors (In certain cases)
    3. Current Super rate is 9.5% of the Gross Income (Some income components may not qualify for Super)
    4. Super has to be paid within 3 Weeks of end of the period, in most cases this is Qtrly.
    5. Super which is paid outside of its due date is not claimable as an expense in the Income Tax Return, this can significantly affect your tax liability.
    6. Late or unpaid super will trigger Super Guarantee Charge, this includes a lot of work for filing the required documentation with ATO and involves penalties and Interest.
  2. Work Rights:

    1. Before employing a person, get a copy of their visa/work-rights, This is good for the employee as well; We have seen a few cases where Immigration dept has taken issue with working beyond the authorized hours.
  3. Minimum Wages:

    1. Ensure that the Wage rate meets the Minimum Wage at the very least. There was a recent increase to this, Currently the Minimum wage is $ 18.93 Per hour ( Casual Employees also get a 25% Loading). This needs to be monitored for changes, to avoid huge paybacks later.
    2. Wages depend upon the Industry and work done by the Employee, It is a good Idea to look up the awards to ascertain you are meeting all the obligations ( Wages, Loading, Leave Etc.,).
  4. Record-Keeping best practices:

    1. Hiring a New Employee? Get these 3 Documents First!!!
      1. Employment Contract
      2. TFN Declaration Form
      3. Super Choice Form
    2. Employees must be given payslips on every pay-run (not once a year), Payslips may include Leave information.
    3. PAYG must be Lodged as per the ATO cycle and paid by due date, to avoid Interest and penalties; In certain cases Directors of the company may be held personally liable for these payments.