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Warning: This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
Workforce education news - Issue 8/2011
Workforce education news - Issue 8/2011
Welcome to the eighth and final edition of Workforce education news for 2011. The newsletter will return in early 2012.
Workforce education news is a free email newsletter we issue regularly to employers and professional associations. It contains updates about tax and superannuation entitlements and obligations that may affect you, your employees and members of your association.
Feel free to pass the newsletter on to your employees and members as the information may interest them.
To update or cancel your subscription, or to provide feedback, email us at wensubscription@ato.gov.au
In some industries it is common for businesses to incorrectly treat their employees as contractors for tax and super purposes. As an employer, you should look at the individual circumstances for the person you are engaging. If others in the industry follow a particular practice, it does not necessarily make it right for your specific arrangements. Some employers believe that engaging a worker as a contractor will save them time and money, but it may end up costing them a lot more as they may face penalties for failing to comply with their tax and super obligations for their workers.
So understanding your relationship with your worker is very important.
To help clarify the relationship we have developed an Employee/contractor decision tool. The tool will provide a decision based on answers to some simple questions. Employers are able to print the results to keep for their records.
Your withholding and super guarantee obligations are different depending on whether your worker is an employee or a contractor. There are other factors that can affect the amount withheld from payments to employees, such as whether your employee has Higher Education Loan Program or Financial Supplement debts, or has reduced withholding due to eligibility for tax offsets.
Our Guide to pay as you go (PAYG) withholding provides information on what you need to do to meet your withholding obligations.
If you pay allowances to your employees, company directors and office holders our Withholding from allowances publication outlines the correct withholding treatment of allowances paid.
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For more information, refer to:
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With the festive season fast approaching, remember to consider your fringe benefits tax obligations when organising Christmas parties and gifts for employees.
Our publication Fringe benefits tax and Christmas parties explains the fringe benefits tax implications of Christmas celebrations and contains useful information on the minor benefits exemption.
In most cases, this means you can spend less than $300 per employee on a Christmas party without being subject to fringe benefits tax, providing certain conditions are met.
As a result of changes to the statutory formula method for calculating car fringe benefits, we have updated chapter 7 of the Fringe benefits tax - a guide for employers. The changes replace the current progressive rates with a flat statutory rate of 20% that applies regardless of the distance travelled.
Workplace giving is a simple and effective way for employees to regularly donate to charities or organisations that are entitled to receive tax deductible donations.
To participate in the workplace giving program, the charity or organisation, such as a library or university, must have deductible gift recipient status.
As an employer, if you wish to offer workplace giving you can invite your employees to enter into a workplace giving program. Your employees will nominate their preferred charity from a selection you provide and then specify the amount they wish to donate.
Generally, the donation amount will be a fixed amount that will be deducted from their salary or wages on each payday. You then pay the donation directly to the charity.
In late December 2011, we plan to upgrade our processing system for pay as you go and fringe benefits tax instalments. We expect the impact to be relatively minor. The upgrade is planned to occur during our regular Christmas closure.
We are letting the community know how this upgrade will affect:
- our systems availability
- our form processing
- what you might see when you receive an instalments notice.
If you contribute too much to super and exceed your $150,000 non-concessional contributions cap in a particular year, you may not have to pay excess contributions tax for that year. You will need to monitor how much you contribute over the next two years to ensure you do not contribute too much and have to pay extra tax.
Non-concessional contributions include:
- contributions you make from your after-tax income
- contributions your partner makes to your super account
- any contributions made over your concessional contributions cap.
The bring-forward provision can be applied if you are less than 65 years old at any time in a financial year and you exceed the non-concessional cap in that year. The bring-forward provision is not available if you have used it in the previous two years. Your total non-concessional contributions over the next two years can not exceed $450,000 minus the contributions you made in the year you use the bring-forward provision.
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If you are 65 years or over on 1 July of that financial year, you cannot use the bring-forward provision. Your non-concessional contributions cap is $150,000.
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From 1 January 2012, subject to the passage of legislation, the government will lower the Higher Education Loan Program (HELP) voluntary repayment bonus, applied to payments of $500 or more, from 10% to 5%.
If you make a voluntary repayment of $500 or more before 31 December 2011, or pay off your debt in full, you will receive a bonus of 10%.
Voluntary repayments of $500 or more received after 31 December 2011, or which pay off your debt in full, will attract a bonus of 5%.
If you have made a mistake on your tax return or in other information you have reported to us you should correct it as quickly as possible. If you disagree with your assessment or another decision we have made about your tax affairs, there are a number of avenues through which you can ask to have the decision reviewed.
To find previous issues of Workforce education news, visit our website at www.ato.gov.au/wen
Last Modified: Monday, 12 December 2011
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