When you are in business you will need to meet superannuation (super) and pay PAYG withholding obligations for your workers. Depending on your business structure, these obligations may also apply to you.
Your tax and super responsibilities will depend on whether your staff members are engaged as employees or as individual contractors.
You may also have FBT obligations.
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Why this is important
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Find out more
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Do you know if your workers are employees or contractors?
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Employees and contractors are treated differently for tax purposes.
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The Employee/contractor decision tool can help you work out whether your workers are employees or contractors for tax and super purposes.
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Do you know what your PAYG withholding obligations are?
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If you pay employees you need to:
- withhold amounts from payments according to the relevant tax tables
- send the amount you withhold to us with your activity statement.
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Pay as you go withholding - what you need to know
To work out your obligations as an employer, refer to Guide for employers.
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Do you know how much PAYG you should withhold?
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The amount of PAYG you withhold may change in the new financial year.
To ensure you are withholding the correct amount check the current tax rates for payments at the start of each new financial year.
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Current tax tables.
Use the Tax withheld calculator.
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Do you know what super obligations you have for employees and some contractors?
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As an employer, you must pay super for your eligible employees and some contractors. This is called the super guarantee.
The minimum amount of super you must pay for each eligible employee is nine per cent (9%) of their earnings base.
Once you have determined the working arrangement (employee or contractor) you may have other tax and super obligations to meet.
If you are in the building and construction industry, you need to understand Taxable Payments Reporting.
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Guide to superannuation for employers
Use the online tools:
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Do you know you need to look after your own super if you are self-employed?
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If you are self-employed, you are not an employee and the super guarantee rules do not apply to you - you have to look after your own super needs.
Most self-employed sole traders or partners can get a tax deduction for up to $50,000 in super contributions per annum.
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Self-employed in the publication Guide to superannuation for individuals - overview
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Do you know that you need to provide your workers' tax file numbers (TFNs) to their super fund or retirement savings account (RSA)?
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Many super funds will not accept payments, or deposit them to super accounts, without a TFN.
If you do not pass on your employee's TFN, you are not meeting your obligations and:
- you will be liable to pay a penalty
- the super fund or RSA may have to pay extra tax on the contributions
- your employee may miss out on super co-contribution payments.
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Guide to superannuation for employers
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Do you know about the Small Business Superannuation Clearing House?
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If you are a small business with 19 employees or less, you may be able to use the free online Super Clearing House.
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The Super Clearing House lets you pay your super contributions in one online transaction.
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Do you know your obligations when an employee leaves?
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- an employee leaves work or changes jobs they may receive different types of payments that are taxed differently. This guide provides information about the tax on the different types of payments and will help you.
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Taxation of termination payments
This guide explains what you need to do when an employee leaves and you have to make an ETP.
Use the Employment termination payment calculator.
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Do you know you may have to pay FBT on some benefits you provide to employees?
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You may have to pay FBT on non-cash benefits. This may include benefits you provide under salary sacrifice arrangements.
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Fringe benefits tax for small business
Use the Fringe benefits tax - car calculator.
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Do you know you may have to report fringe benefits on employees' annual payment summaries?
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Employees must report the value of fringe benefits in their tax returns. These amounts are also taken into consideration when accessing Centrelink benefits.
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Reportable fringe benefits - facts for employees
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Do you know what to do if you need some help meeting your tax obligations as an employer?
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You can find out more about self-employment and employing others at one of our introductory seminars for small businesses.
We also provide a free and tailored assistance service to help you understand your tax obligations and entitlements, and what you need to do.
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Small business webinars
Free and helpful tax assistance - no strings attached
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Do you have any Australian resident employees that work for you in a foreign country?
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From 1 July 2009, most foreign employment income derived by Australian residents who are engaged in foreign service for a continuous period of 91 days or more will not be exempt from income tax.
However, foreign employment income for service relating to certain development projects and charitable or government activities will continue to be exempt.
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Working overseas - what you need to know
PAYG withholding
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Are you engaging non residents to work in Australia?
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If you employ a full-time, part-time or casual worker or a contractor wholly or principally for labour in Australia, you may have Australian super obligations and PAYG Withholding obligations.
If you provide benefits to them or their associate (typically family members) in place of, or in addition to, salary or wages, you may have FBT obligations.
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PAYG withholding
Guide for employers
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Do you know about the Australian Government's Growing your business checklist
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This checklist covers many of the issues needed to help you grow a business, such as increasing staff, diversifying products or services, exporting goods, franchising your business or simply moving to bigger premises.
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Refer to the Growing your business checklist available from www.business.gov.au
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Last Modified: Tuesday, 11 December 2012