All Employees and contractors posts

Re: Wages paid to Individuals who are employees of another company

TaxedoMask — Thu, 27 Feb 2020 23:29:27 GMT

As this is hypothetical - the first question is why would you do this? What is your aim? Also are these entities in a TCG or standalone? Are they related entities?

Generally Company A would not pay for Company B's expenses unless Company A is using the employees of Company B. in which case Company B would charge Company A and not the other way around.

payment summary issued for the wrong year by employee

toby — Thu, 27 Feb 2020 08:09:00 GMT

Hi,

I worked for a company that issued me with a second payment summary after changing their payment system and needing to reconcile it. eg they had misreported to the ATO and in fact, I had earnt a few thousand more, this is true the first payment summary was short of my full earnings. I am fine with this, mistakes happen. However, what the issue is, is that they put the second payment summary in the next tax year. I did not work in this tax year for them. In fact, my employment had finished months earlier. Details are as follows I finished work in February 2018 as I was made redundant issued with payment summary all ok. Then in 2019, they issue another payment summary as they had underreported in 2018. This has tax implications for me which I do not feel I should have to bear the costs for as it was not my mistake. Is there anything I can do, so my tax filed can be true to the income I earnt it in.

Wages paid to Individuals who are employees of another company

ijaz_aziz — Thu, 27 Feb 2020 04:32:23 GMT

This is a hypothetical question with these facts:

Company A would like to pay the wages/withholding tax/super etc to employees of company B.

The employees would be formally employed by Company B however, Company B is not set up for payroll, they require Company A to perform the payroll function of company B until such time that Company B is set up for payroll, e.g. single touch payroll, IT withholding, super etc.

During this time, Company A would charge Company B a fee for all costs associated with this arrangement.

Is there an issue with this arrangement? In particular, can company A pay and report the wages paid to employees of Company B in its payroll if the employees are not formally employed by Company A.

Thanks,

Jaz.

hobby income basketball referee

johndunneone — Wed, 26 Feb 2020 07:05:54 GMT

from a tax declaration iam a hobby

iam a basketball referee i do that for basketball sa in south australia

i like to now were i stand when i and going to earned $250 a week for this year which equates to $16,000 dollar per year

I must a some stage pay tax which i am at a loss try to get some sense out of ATO

i dont have a contract with basketball sa i dont have a ABN or tax file number

iam currently on a dissibility support pension iam aloud to earn $1240.00 per month without affecting my dsp

plz can someone point me in the right direction as i dont wont to get in trouble with the ato

i dont have a money to speak to a tax ccountant

Re: Allowance paid to Contractor, GST

HeidiSutton — Tue, 25 Feb 2020 02:54:57 GMT

Just want to clarify that this would apply to all contractor allowances. We currently contract trainers to faciliate training and we pay them a training fee and where they have to travel pay a meal allowance, and travel allowances related to km's travelled and/or distance from home. Are all contractor fees attractive of GST or does it depend on the circumstances of the allowance?

Re: Sub contractor

RodrigoP — Mon, 24 Feb 2020 05:25:39 GMT

Hi@ kat1981

Thanks for your Question. A client must register for Good and Services (GST) if they carrying on a business or enterprise and the GST turnover (Gross business income) not the profit at or above the GST turnover threshold of $75,000 or $150,000 for not for profit organisations.

If the turnover is below this threshold, they still register for GST if,Taxi services are supplied including ride-sourcing.

If you are not registered for GST you cannot charge GST on sales and also cannot claim GST credits on purchases as TaxedoMask mentioned.

If you only register for GST then you will be reporting GST on a Business Activity Statement (BAS) every 3 months or annually depending on the GST turnover threshold.

Your husband can put some money aside towards the end of the year tax bills but we do not require you to pay tax upfront (PAYGI) for the first year.

Hope this will assist you.

Thanks

RodrigoP

Re: TFN Declarations not made to ATO

RodrigoP — Mon, 24 Feb 2020 03:39:47 GMT

Hi@ Jochim

Thanks for your question.TFN declarations need to be lodged with the ATO with in 14 days after the form is either signed by the payee or completed by the payer( if not provided by the payee).

failure to lodge (FTL) on time penalty may be applied if you have not lodged them with the 14 day time frame. I some situations you may ask for it to be remitted in full or in part if there are extenuating circumstances.

Have a look at our ATO failure to lodge on time penalty how to request for remission on FTL only if you qualify.

Hope this will help you have a better understanding.

Thank you.

RodrigoP

Re: Working for a Company without an Australian Office

MayW — Mon, 24 Feb 2020 02:39:38 GMT

You will need to consider if the company is to hire you as employee or contractor.

Check out the employee or contractor page on our website for more information which will help you determine your status.

If you end up being an employee:

Do I need an ABN? No
Do I need to ask for the company to send me an invoice for my wages? No
Apart from ABN, any other things needed to be registered for? No

Or, as a contractor:

Do I need an ABN? You may need one depends on your contract.
Do I need to ask for the company to send me an invoice for my wages? Payment will be made to you based on terms of your invoice or contract.
Apart from ABN, any other things needed to be registered for? GST or PAYGI (Pay as you Go Instalments).

For more information about GST and PAYGI have a look at a website.

Hope this helps.

Thanks MayW

Re: Sub contractor

TaxedoMask — Mon, 24 Feb 2020 02:09:56 GMT

<$75k doesnt need to register for GST, cannot charge GST on sales and cannot claim GST credits on purchases.

Whether you register is up to you but once you hit the 75k threshold you are required to register. (note its 150k for nfp).

Re: Actors & Artist PAYG Tax

macfanboy — Sun, 23 Feb 2020 00:49:03 GMT

No difference between the two and they could apply for Income Averaging as Special Professionals.

Re: Working for a Company without an Australian Office

daniloong — Fri, 21 Feb 2020 10:50:27 GMT

Hi , I don't think we have the same scenario in mind.

I'm currently a permanent resident here in AU and I found a job online that is offered by a US-based company. My question here is, what do I need to comply with the tax laws in AU should I decide to work for them?

1. Do I need an ABN?

2. Do I need to ask for the company to send me an invoice for my wages?

3. Apart from ABN, any other things needed to be registered for?

Thanks.

Dan

Re: wages due on public holiday

TaxedoMask — Fri, 21 Feb 2020 03:39:42 GMT

You'd probably have to read the applicable award.

Convention is that you pay before and not after if payment falls due on a public holiday.

wages due on public holiday

1Christine1 — Fri, 21 Feb 2020 00:54:44 GMT

Hello, is there any sort of legislation that states when payment for wages fall on a public holiday, that payment should be made the day before? Is it ok to pay the day after?

Re: Working for a Company without an Australian Office

Iacata — Thu, 20 Feb 2020 22:07:07 GMT

Hi there,

I have the same question, so I am following the topic. Depending on the work visa (i.e. TSS 482), I do not think a foreign company can hire a foreign contractor (who pay taxes themselves), but only an employee (company must pay taxes). Can someone confirm that?

Also:

How does the foreign company deduct taxes from the employee-Australian resident?
The employment contract must be based on AU laws?

Thanks

Re: Working for a Company without an Australian Office

daniloong — Thu, 20 Feb 2020 12:17:26 GMT

Hi ,

The company doesn't have any presence here in Australia yet nor they're planning to have soon. It is an IT company based in the U.S. and they need someone to be based in Australia to remotely support the Asia Pacific region.

Now my question here is, do I need an ABN if I will work for them? Also, is it the same scenario as being a contractor and them sending me a monthly invoice to reflect my wages and quoting my ABN?

Thanks.

Dan

Sub contractor

Kat1981 — Thu, 20 Feb 2020 10:53:34 GMT

Hi All
My husband became a sub contractor this month. He uses his abn that he registered for a business for doing little jobs in the community I.e mowing lawns a couple of years ago. He is using this abn number now working in construction. We checked it was still valid before putting on his invoice.
His boss showed him how to write out his invoices. It included GST. Boss emailed today to say that the abn is not registered for tax so just means he can’t charge it in his invoices moving forward. He doesn’t earn over $75000 per year so he doesn’t need to register for GST or should he register?
Does hubby call ato to get an account number to put his weekly tax into. Not sure how this sub contracting stuff works. Where do we put his tax money??
Thanks

Re: GST

RodrigoP — Thu, 20 Feb 2020 05:39:16 GMT

Hi ,

Have a look at Employee/contractor decision tool. This may give you a better understanding of your obligations on PAYG and Super.

if you pay tax overseas you may be eligible for foreign income tax offsets.

Hope this will help you.

Re: Working for a Company without an Australian Office

RodrigoP — Thu, 20 Feb 2020 04:46:02 GMT

Hi ,

Depending if you are an Australian resident for tax purposes and also if you are working as a contractor or an employee you will have to lodge a tax return. The income you earn from an overseas Business will be considered as foreign income.

Also make a note that if you had paid tax overseas you may be eligible to claim an offset.

Hope this helps.

RodrigoP

Re: sales commission payable on gst component of item sold

DebC — Thu, 20 Feb 2020 04:24:03 GMT

Thanks for your post.

is correct. GST is collected by your employer on our behalf. In turn it would be reasonable that you would only be paid commission on the part of the sale kept by your employer.

In saying that how your commission is calculated ultimately is determined by your award, agreement or contract. If you're not sure how it's calculated you may need to contact Fair Work. You can find their contact details on the Fair Work Website.

If you would like to find out how GST works you could look at the GST page on our website. There are some useful links and videos you can check out.

Hope this helps.

Thanks, DebC

Re: Employer pays for 457 visa

gossss80 — Wed, 19 Feb 2020 14:44:17 GMT

Thank you for that.

I thought it would be a business expense as I as an employer was required to pay part of the visa application fee. So to me it is a cost associated with employee, same like his superannuation.

TFN Declarations not made to ATO

Joachim — Wed, 19 Feb 2020 03:22:49 GMT

Hi, I have another issue on which I would like to receive community's support .

Per ATO , when an employee joins a business , the employee needs to provide a signed TFN declaration to employer and employer in turn

need to lodge this with ATO within 14 days.

I may have come across a scenario where the employee has properly provide the declaration and the employer has processed pay based on the declaration's details, but have not lodged the declaration with ATO.

In this kind of a situation is the employer liable for any penalties. Can the employer now lodge all declarations that were not lodged before without any penalties ? . Thank you

Actors & Artist PAYG Tax

NaseemK — Wed, 19 Feb 2020 02:44:52 GMT

1) Can you please help us to understand the difference between Artists and Actor and their withholding tax on income

Re: Employer not paid tax

JasonT — Wed, 19 Feb 2020 01:59:15 GMT

Hi ,

Sorry to hear of your frustrations with the former employer.

It sounds like you've endeavoured to have that former employer meet their obligations without success.

You can still lodge your return when you weren't provided payslips, a payment summary and there are no income statement details available via your ATO online.

Gross pay estimator

You can also report the former employer for not meeting their obligations by completing the online tip-off form.

I recommend to check if there are other employee entitlements that haven't been met. Follow the information in this link to check and the further action to take if necessary.

Let us know if you have any further questions,

JasonT

Re: Employer pays for 457 visa

SYoungTax — Wed, 19 Feb 2020 00:58:27 GMT

Hi gossss80,

Please note that Visa 457 was discontinued from 17 March 2018. From 18 March 2018 the 482 TSS visa came into effect:

https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/repealed-visas/temporary-work-skilled-457

To determine if this visa fee is a valid business expense, does it fulfil the 3 rules:

The expense must have been for your business, not for private use - IS IT FOR THE BUSINESS?
If the expense is for a mix of business and private use, you can only claim the portion that is used for your business. - CLAIM BUSINESS PORTION
You must have records to prove it. - KEEP COPY OF INVOICE/RECEIPT

Refer to ATO website: https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/

Good luck with the visa process!

PS. Please note that for your employee, the costs of obtaining a visa in not tax deductible as they must be directly related to earning assessable income and these costs are considered to be private in nature and not deductible. THe ATO have information about this in AOT ID 2002/208 Deductibility of visa expenses - temporary business visa to remain in Australia.

Employer pays for 457 visa

gossss80 — Tue, 18 Feb 2020 04:24:16 GMT

Hi there,

I am sponsoring an employee and I (employer) was required to pay part of his visa application costs.

Is this visa fee a business expense and tax deductible?

Thank you!

Re: Superannuation

ChrisR — Tue, 18 Feb 2020 01:21:52 GMT

It looks like we have already answered this one. You can check out the answer here: Superannuation

Thanks,

ChrisR

GST

BDD — Mon, 17 Feb 2020 22:49:04 GMT

i am going through an opportunity with an overseas company where they would like to engage me for a 2 year period, and pay a fixed amount of money direct into my account. I will be working at their direction. I will have to pay the local PAYG and Super. The overseas company does not have a local base and are looking to expand in Australia. i am now in the final stage of negotiation. i would like to know if this arrangement will attract GST or it can be deemed as an employer/employee relationship where i meet all the statutory obligations.

Kind regards

Re: Working for a Company without an Australian Office

TaxedoMask — Mon, 17 Feb 2020 22:24:48 GMT

Depending on the nature of the business operations and how it intends to operate in Australia - you may wish to have a read here. For foreign inbounds, I'd also consider if global turnover is over AU$1b - SGE as well as DPT rules may apply.

Working for a Company without an Australian Office

daniloong — Mon, 17 Feb 2020 12:10:57 GMT

What are the requirements if one intends to work for an international company that doesn't have any presence in Australia yet? Do you need an ABN for this? Also, how will the tax be deducted/calculated? Likewise, the super will be paid voluntarily as well?

Re: OT meal allowance and super

ChrisR — Mon, 17 Feb 2020 06:51:48 GMT

Thanks for your post.

The minimum super that you should be paid each quarter is called the super guarantee (SG). Currently the SG is 9.5% of your ordinary time earnings (OTE).

For more information about SG and how much to pay, have a look at our website.

As a casual employee, OTE is usually the amount you earn for your ordinary hours of work, unless specified in an award or agreement. To find out what your ordinary hours are, we recommend that you have a look at the applicable document.

If you're not sure what that document is, you may need to get in touch with the Fair Work Ombudsman. They are also the best people to ask about your meal allowance eligibility. Refer to the contact us page on their website.

If your time and a half evening rate is due to a shift loading, SG is payable at 9.5% of the time and a half rate as shift loadings are considered OTE. If it is an overtime rate, SG isn't payable as overtime isn't OTE.

We have a checklist on our website that you can check out if you like. It details a number of common payment types and helps employers identify what payments are considered OTE.

If after checking out your award or agreement you don't believe your employer is paying your super correctly, you may want to have a read of the unpaid super from your employer page. It suggests what steps you should follow.

Hope this helps.

Thanks,

ChrisR

Re: Superannuation

ChrisR — Mon, 17 Feb 2020 06:08:59 GMT

Thanks for your question.

The minimum super you must pay each quarter for each eligible employee is called the super guarantee (SG). Currently the SG is 9.5% of their ordinary time earnings (OTE).

Your employee's ordinary hours will be the normal hours they work, unless their hours are specified in an award or agreement. If there are specified hours and your employees are required to work outside of them, they may be entitled to overtime. Payments such as overtime are not considered OTE.

The Fair Work Act's definition of ordinary hours for workers not under an award or agreement caps them at 38 hours. This definition does not override the super laws. In turn, SG can be payable on more than 38 hours a week.

For more information about SG, OTE, ordinary hours and how much to pay, you can check out our website.

Hope this helps.

Thanks,

ChrisR

Re: Using overseas contractors

NateH — Mon, 17 Feb 2020 02:56:34 GMT

Hi ,

We have a page about tax on Australian income for foreign residents which sets it all out. The short answer though is yes, they need to lodge a tax return in Australia because the income is Australian sourced.

You don't have an obligation to ensure they are complying with Australian taxation law, but if you feel like any of them are not doing the right thing then you can let us know and we'll look into it.

Thanks, NateH

Re: Salary Sacrificing - Local Council

NateH — Mon, 17 Feb 2020 02:47:50 GMT

Hi ,

We have responded to your other query about this and have forwarded it on to the relevant team who will be in touch.

Thanks, NateH

Re: sales commission payable on gst component of item sold

MCA_Accountants — Sat, 15 Feb 2020 10:26:02 GMT

I would expect the commision is based on the GST exclusive value - the GST is not your employees money, so it's tough for an employer to pay a share of that to you

It would only go to your super fund if authorised by you

Re: Employer not paid tax

MCA_Accountants — Sat, 15 Feb 2020 08:05:23 GMT

Call the ATO and explain the situation

sales commission payable on gst component of item sold

bloggs — Sat, 15 Feb 2020 01:08:47 GMT

Am I entitled to be paid a sales commission on an item I sell for my employer which includes a GST component. EG I sell an item for say $19,800 which includes GST of $1800

I am being told that I dont get paid my 10% commission on the entire $19.8K only the

$18K before GST is added.

My workplace agreement simply states I get 10% on all sales.

There is no mention of the GST rubbish outlined.

Another salesman told me he thought they paid the commission on the GST component

into our Super fund.

This was not authorised by me.

These figures are not the exact price of the item sold, merely a simple mathematical example.

Employer not paid tax

Mcginty1 — Sat, 15 Feb 2020 00:07:17 GMT

I am on a WHM visa 417. I was employed by a small business in January 2019 that qualified as regional work to complete my 88 days for the 2nd year visa. I worked there from January 2019-July 2019, before having to return home to the UK to apply for the 2nd year visa. My visa was accepted and I returned to the same employer in September 2019. I worked there until February 2020. During my time I received no payslips. I have asked for them and been in touch with the fair work ombudsman in relation to this. Upon further investigation using MyGov which I have linked to the ATO. I have not had any tax lodged for the duration of my employment. I was employed as a full time employee on an award rate. How do I solve this matter.

Superannuation

1Christine1 — Fri, 14 Feb 2020 02:20:24 GMT

If staff are rostered on for 4 x 12 hour night shifts per week and it is considered their regular night shift work (their "normal" shifts), does SGC then apply to those hours or merely 38 hours?

Thanks

Christine

OT meal allowance and super

Kendz28 — Thu, 13 Feb 2020 01:27:13 GMT

Hi,

I’m questioning OT meal allowance and super. I am a casual nightshift worker but it seems my super is calculated on day shift rates and only for Monday - Friday, however the business I work in operates 7 days a week. Is this legal to calculate super on a day shift rate even though my evening rate is time and a half, therefore I’m realistically not getting the right amount of super?

Also can some one please clarify OT and meal allowances, I always generally get meal allowance now I’m working on a different site and did over 60 hours this week and my company has said no you don’t get meal allowance because the site you’re on. Can someone please explain this or show me a legal document stating the rules of OT meal allowances?

Thank you!

Superannuation

1Christine1 — Thu, 13 Feb 2020 00:35:38 GMT

If staff are rostered on for 4 x 12 hour night shifts per week and it is considered their regular night shift work (their "normal" shifts), does SGC then apply to those hours or merely 38 hours?

Thanks

Christine

Using overseas contractors

georgiebell — Wed, 12 Feb 2020 04:34:12 GMT

Hi there,

I work for a business that hires independant contractors overseas. Per Australian law they are contractors, most of them run their own businesses or freelance for us. They are located in South America, New Zealand and the Philippines. As they are contractors we don't pay their tax or Super but as they are working for an Australian company are they obligated to pay Australian tax or are they only bound by the laws of their country? Do we, as a company have any obligation to make sure they are complying with Australian or local law? None of these contractors are Australian citizens.

Thanks.

Salary Sacrificing - Local Council

juliakendall32 — Wed, 12 Feb 2020 02:47:29 GMT

Hi,

I work for a Regional Council and have been tasked with setting up the Salary Packaging Policies and Procedures on behalf of the Council, and I was wondering if you could provide me with some information?

Who does salary Sacrificing extend to in a council setting, is it only full time, permanent employees, or can casuals access salary sacrificing as well?
What percentage of an employee’s wage, or amount can be salary sacrificed by an employee?
Are there any Fringe Benefit Tax implications on Council or Council staff?

Thanks.

Re: Consulting and asked to take on part-time role

ChrisR — Mon, 10 Feb 2020 07:16:40 GMT

Thanks for your question.

There are no specific rules that prevent such an arrangement, especially as it sounds like there is a clear demarcation between the two roles. From what you have advised, each role appears to have distinctly different tasks and responsibilities.

It is important to note that as you are running your consultancy via a company, you are not being personally contracted by the other company. Where there could be a potential for issues is if the line between your role as an employee and your role as a consultant becomes blurred.

You may want to have a look at the employee or contractor page on our website. It provides some useful information about the differences between employees and contractors and employer's tax and super obligations.

Hope this helps.

Thanks,

ChrisR

Re: Gratuities

NateH — Mon, 10 Feb 2020 05:13:09 GMT

Hi ,

A gratuity would be the most appropriate ETP category for that kind of payment.

Thanks, NateH

Re: Car park expense

KylieS — Sun, 09 Feb 2020 22:57:51 GMT

Hi ,

This wouldn't be a Tax question more a workplace agreement or question for fair work Australia.

KylieS

Re: Donations to employees affected by fires

KylieS — Fri, 07 Feb 2020 05:59:38 GMT

Hi ,

We’re sorry for the delay in getting back to you and want to thank you for your patience.

We’ve checked in with the experts who confirmed assistance payments to individuals from charities are generally not taxable given that payments are made voluntarily and there’s no right or entitlement to the payment. Similarly, emergency assistance from an employer to an employee (for example, one-off and other non-periodic emergency relief payments) is not taxable.

Charities can make gifts to their employees without creating an income tax or FBT liability as long as the gift is consistent with their charitable purpose. For example, a charity established to provide care and re homing of animals can’t make a gift to it’s employees.

As you’re a charity with DGR status, any gifts made to employees must also be consistent with any special conditions attached to the particular DGR category you’re endorsed under.

You can find more information about Disaster Assistance Payments on our website. If you’d like to speak to someone further you can email us at atoendorsements@ato.gov.au or contact the Non for profit area directly.

KylieS

Re: Working for my Australian Company, but based in UK. What are the rules?

TaxedoMask — Fri, 07 Feb 2020 05:31:28 GMT

It depends. Why are you going to the UK? If its for 2 years I assume this is a temporary arrangement / on a temporary 2 year business visa.

In this case, you are likely to still be considered an Australian tax resident - see IT 2650 thus taxed accordingly. You are still required to lodge a tax return as normal.

UK tax status - you need to ask a UK tax adviser. Note that there is a double taxation treaty in place so there should be some relief there.

Working overseas generally does not affect your employee/contractor status - unless the nature of your work changes from its currrent state (outside of the location move).

Re: Work Experience

TaxedoMask — Thu, 06 Feb 2020 04:34:52 GMT

Yeah. You would want to. It would also ensure whether or not you are cross the 450 per month threshold for SG.

Consulting and asked to take on part-time role

Normal_person — Thu, 06 Feb 2020 04:20:58 GMT

I have been running my own consultancy (Pty Ltd company, with ABN) for the past six years. I and my partner are the only two consultants. Over the past couple of years I have been providing consistent consulting services, billed on an agreed hourly rate for specific projects for a single company. The amount of work is around 60% of my total consulting annual income, and not subject to personal services income.

The company has recently asked me to join as a part-time employee for 1 or 2 days per week to provide supervision of other employees, with the balance of time (say 8-12 hours/week) to be charged on an hourly consulting rate for the technical aspects of the role (providing consulting advice to the company's clients. The part-time role would be as an employee, with accrued leave & super entitlements.

My question is whether this legal/allowed to have a 'split' role as I have described? What are the tax implications?

Re: Employee or contractor

ChrisR — Thu, 06 Feb 2020 01:51:23 GMT

Thanks for your question.

There are a number of factors that determine whether a worker is an employee or a contractor. You can have a read of the employee or contractor page on our website for more information.

It is also important to note that not everyone is entitled to an ABN. If you try to apply for one, you will be asked a series of questions to determine your entitlement. Check out the ABN entitlement page on the Australian Business Register website for more details.

Hope this helps.

Thanks, ChrisR

Re: Out of Pocket Expenses

TaxedoMask — Thu, 06 Feb 2020 00:54:17 GMT

No - it depends on the expense policy and the employment agreement signed.

Tax law in Australia does not restrict a company from reimbursing or not reimbursing such expenditure. However if there is a reimbursement - then there are tax implications.

Out of Pocket Expenses

1Christine1 — Wed, 05 Feb 2020 22:10:13 GMT

Good morning, quick question - is it compulsory for an employer to reimburse an employee for out of pocket expenses such as car parking expenses?

Thanks Christine

Re: Gratuities

Seeoex — Wed, 05 Feb 2020 10:26:59 GMT

Thank you, so can a lump sum "gift" on voluntary retirement be treated as a gratuity for tax purposes?

Re: locum GST invoicing

NateH — Wed, 05 Feb 2020 04:52:37 GMT

Hi ,

You are correct, GST is 10% added on to the price you charge for certain goods or services.

We have a web page on How GST works and on that page there are links to a page about issuing tax invoices with GST.

Hope this helps. Thanks, NateH

Car park expense

1Christine1 — Wed, 05 Feb 2020 02:59:39 GMT

Is it compulsory for an employer to reimburse an employee for car park when visiting clients for business?

Re: Gratuities

macfanboy — Tue, 04 Feb 2020 22:25:28 GMT

Very similar to a "Golden Handshake", that's why they are mentioned together.

A golden handshake is a clause in an employment contract that provides a significant severance package in the case that they lose their job through firing, restructuring, or even scheduled retirement

Gratuities

Seeoex — Tue, 04 Feb 2020 14:06:22 GMT

Gratuities are commonly mentioned in the ETP area of the ATO website alongside Golden Handshakes. Could you please tell me in what situation would a gratuity payment be made to an employee? I am struggling to find a definition of gratuity payments.

Re: Tax agreement for receiving salary directly from a client

KylieS — Tue, 04 Feb 2020 04:57:41 GMT

Hi ,

I would contact your credit provider and ask them what they require. I am sure they will have there own standard requirements.

KylieS

Work Experience

1Christine1 — Tue, 04 Feb 2020 00:40:59 GMT

Should a student on work experience be put on payroll?

They are being paid $40 a day.

Thanks,

Christine

Working for my Australian Company, but based in UK. What are the rules?

ClareUK — Mon, 03 Feb 2020 23:18:57 GMT

I am currently employed by an Australian company, however am relocating to the UK for a 2 year period this March. The company is keen to keep me working for them from my UK base at 30 hours/week. What are the rules around this? Do I need to return to Australia every 3 months? Do I continue to pay tax and lodge Austrlaian Tax Return? Do I need to pay UK tax or lodge UK tax return? Would I be an employee or contractor? Thanks for your advice.

Re: Directors Fees

1Christine1 — Mon, 03 Feb 2020 00:06:19 GMT

Thanks Jason for your help.

Re: Directors Fees

JasonT — Sun, 02 Feb 2020 23:58:24 GMT

Hi ,

There's no requirement for a director to be paid wages/ salary.

The options for how a director can receive an income are wages/ salary, director fees, distributions or a combination of these in some instances.

These options have associated tax and/ or super obligations.

As a director.

Hope this helps!

JasonT

Employee or contractor

Csains — Sun, 02 Feb 2020 08:44:59 GMT

I work for a small company as a full time employee. There are several other employees and the rest are subcontractors on ABN . My employer has asked if I would be interested going on to ABN. Is that allowed ? Everyone on ABN that works there works full time and only for him. My understanding is that if you work for someone full time you are an employee not a contractor

Re: Tax agreement for receiving salary directly from a client

parev — Fri, 31 Jan 2020 11:20:52 GMT

Hey ,

Thanks for the reply. Yes, I am negotiating as the employee of the company and your clarification completely makes sense now. I'll move forward with your suggestion.

I just had one more question, one of my credit providers require me to show my income statement, so do I send a combination of my statement, contract and company agreement with the client to the provider?

Thanks once again.

Re: Tax agreement for receiving salary directly from a client

BreeH — Fri, 31 Jan 2020 05:08:53 GMT

Thanks for your patience, your question raises lots of interesting issues.

Thanks for highlighting factual issues that can make a difference when looking at these issues.

Assuming you're employed by the company and you're negotiating in that capacity as an employee, any amount you receive from your employer in return for providing your services will be part of your assessable income. It might be calculated by reference to the amount the company receives from one of it's clients but it still represents remuneration for you. It normally doesn't make any difference whether your employer pays you directly for your services or indirectly such as in the way you describe in your question.

Now let's look at your specific questions:

1. It really doesn't matter whether you receive a salary, bonus or commission it's all considered to be remuneration for providing services to the company and your marginal tax rate will apply to that income. How the amount is paid to you is a matter for you and the company to decide. You may find that a variable salary means that you pay different amounts of tax for each payment period. This will all wash out at the end of the year when you lodge your tax return and we look at the total amount of tax that you paid over the whole year.

2. It sounds like you're employed by the company and the company has arranged for you to be paid through the client depositing amounts to your account. If that is right there are no issues with your employee status with the company.

3. It's likely that there will be an agreement between the client and the company and that may well include an agreement for the client to pay you on behalf of the company. We would expect that the company would be responsible for wittholding any tax on your behalf.

Re: Letter Box Phamplet Distribution

macfanboy — Fri, 31 Jan 2020 01:23:09 GMT

Is there a particular reason why you wish to claim a Superannuation deduction?

You don't need to have an ABN if it is just a one-off arrangement

Even if the distributor considers you to be a contractor, if you aren't running an enterprise, you won't be eligible for an ABN.

You should either receive a payment summary or the income will be shown on your myGov account.

Declare the income at item 2 in the tax return

Letter Box Phamplet Distribution

Parra09 — Fri, 31 Jan 2020 00:24:03 GMT

I am soon turning 65 and am retired however I wish do do Letter Box Phamplet Distribution for a 30 day period ,in order to satisfy the works test to be eligible to claim a super deduction. As I will be considered a sub contractor, do I need an ABN and where will I declare this income on my tax return.

Thanks

locum GST invoicing

ratrace — Thu, 30 Jan 2020 07:02:51 GMT

Hi guys,

I am a locum veterinarian.

I am confused regarding the GST.

I have an abn that is registered for GST as I run a mobile business as well.

So when i invoice clinics/ clients I use the same ABN.

When i invoice clients i need to add the GST amount which is 10% is that right?

What is the best way of invoicing clients. or what is best for me.

I take it i charge $50/hr without GST that would be the best scenario for me vs $50/hr with GST included?

Re: Meal Allowances for Casuals

macfanboy — Wed, 29 Jan 2020 23:35:58 GMT

Not really a Tax related question, more an Industry award question which you should seek advice from your union, employer or Fair work Australia.

A quick Google search revealed that I think your award is here

Meal Allowances for Casuals

bobch — Wed, 29 Jan 2020 22:37:17 GMT

Under the Building & Construction Award, are casual employees entitled to meal allowances and if so when does this apply?

Re: Superannuation Guarantee payments

NicolaC — Wed, 29 Jan 2020 02:12:18 GMT

If your employee hasn't chosen a fund, you must make a superannuation guarantee payment to your employer-nominated fund.

As a minimum, you'll need to provide the employee's:

full name
residential address
tax file number
phone number

This is set out under 7.07E Employee details for contribution of the Superannuation Industry (Supervision) Regulations.

To avoid the amount being refunded, I'd recommend speaking to your fund prior to making the payment to make sure the information you have is sufficient.

NicolaC

Re: Travel allowances for employee in small business

macfanboy — Wed, 29 Jan 2020 01:52:44 GMT

The ATO like you to always have some kind of proof regardless of tax rulings, because they 'may' require proof.

Best is receipts, others can be bank statements clearly showing expense.

Where a travel allowance is received and the claim does not exceed the reasonable allowance amount, a "Travel Diary' must be kept for stays over 6 nights in a row for overseas travel or for any travel for 6 nights in a row if the claim exceeds the reasonable allowance.

A travel diary is a document that shows details of the taxpayer's activities. dates, places, times and duration of their activities and travel.

For low-cost expenses less than $10:

The requirement to obtain documentary evidence does not apply where the taxpayer claims expenses which individually do not exceed $10 and which, in total, do not exceed $200 for the income year. In such cases, it will be sufficient to keep a diary record of the expenses.

The taxpayer’s diary records must show the same details as a receipt from a supplier.

Re: Travel allowances for employee in small business

AVA — Wed, 29 Jan 2020 00:49:16 GMT

wrote:

Just because you are not withholding any tax doesn't mean that they are not required to pay any tax on this allowance.

I would suggest that they do keep all receipts and claim them back as deductions when they lodge their tax returns.

They don't have to keep receipts if they are within a reasonable allowance rate but the ATO can request for them to explain how they arrived at the amount they are claiming.

You not taxing them means they have more in their pocket each pay period but like I said still counts towards their taxable income.

They don't have to claim a deduction but will be taxed extra and may incur a tax debt.

Thank you macfanboy for your informed reply.

I will advise my employees that all receipts should be kept, though this does seem contrary to the TD2019/11 ruling 3. "The reasonable amounts only provide the maximum amount you can claim without being required to substantiate your expenditure (refer to paragraph 33 of TR 2004/6)."

If the ATO requests proof and no receipts have been kept then would a travel diary suffice (proof being airfares, and travel diary)?

Thanks

Re: Travel allowances for employee in small business

macfanboy — Tue, 28 Jan 2020 23:59:22 GMT

Just because you are not withholding any tax doesn't mean that they are not required to pay any tax on this allowance.

I would suggest that they do keep all receipts and claim them back as deductions when they lodge their tax returns.

They don't have to keep receipts if they are within a reasonable allowance rate but the ATO can request for them to explain how they arrived at the amount they are claiming.

You not taxing them means they have more in their pocket each pay period but like I said still counts towards their taxable income.

They don't have to claim a deduction but will be taxed extra and may incur a tax debt.

Travel allowances for employee in small business

AVA — Tue, 28 Jan 2020 06:57:29 GMT

I'm a small business owner that provides consulting services overseas and across Australia. I pay my employees a travel allowance (equal to the reasonable travel allowance rate) for the time that they are away and thus don't withhold tax for this allowance (i.e. the exception applies as stated in TD 2019/11).

Is my understanding correct - that they are not required to retain their reciepts to substantiate their expenditure and prove that they used their entire allowance, given that the amounts are within the 'reasonable travel allowance' and they are not claiming any travel related deductions?

Re: Obligations on new Australian resident earning income from NZ company

NicolaC — Tue, 28 Jan 2020 06:18:52 GMT

As you're an employee working in Australia for a salary or wages, you're generally entitled to super guarantee. In this situation, your employer should provide the super guarantee for you.

If you've paid NZ tax, you should be entitled to a foreign income tax offset. You should add the NZ tax back into your net employment income to determine your assessable foreign income and include that on your Australian tax return. Read more about reporting your foreign employment income.

NicolaC

Re: Tax on Unused Annual Leave and unused Long Service Leave

macfanboy — Tue, 28 Jan 2020 05:52:05 GMT

Annual Leave & Long Service Leave accrued between 16 August 1978 to 17 August 1993 should be taxed at 32% and paid as a Lump Sum A payment.

There is a Lump Sum A Tax offset which will restrict t to a maximum of 30%.

Any other leave accrued post 17 August 1993 is included in Gross Pay.

https://www.ato.gov.au/Rates/Schedule-7---Tax-table-for-unused-leave-payments-on-termination-of-employment/

Tax on Unused Annual Leave and unused Long Service Leave

KerryG — Tue, 28 Jan 2020 04:37:35 GMT

I have an employee leaving after 27 years (resignation), they have unused long service leave and unused annual leave to be paid out. There are only 25 days accrued before 18/8/93 and the balance on/after 18/8/93. Do I add up the total gross payable of both unused lsl and annual leave and then tax according to the marginal rate for amounts accrued after 18/8/93. It just seems like a lot tax to be withheld. And also, what do i put on payment summary.

Thanks in advance

Re: Superannuation Guarantee payments

NateH — Tue, 28 Jan 2020 01:56:59 GMT

Hi ,

We have sent this off to a technical area to get an answer for you.

Thanks, NateH

Directors Fees

1Christine1 — Mon, 27 Jan 2020 21:55:04 GMT

Just a quick question - is it a requirement that a company pays wages to directors?

Thanks, Christine

Re: Sole Trader v Employee

DuncanS — Mon, 27 Jan 2020 01:05:34 GMT

I would be doing the Employee/contractor decision tool on the ATO website.

Any employer should also be utilising this ATO tool.

I understand an employer can face ATO issues if a contractor is deemed by the ATO to be a deemed employee.

Given the recent press regarding Payroll and the increased scrutiny by the ATO on employers regarding contractors, one would suggest a potential employer should be cautious.

Duncan

Re: Superannuation Guarantee payments

Biggiesmalls — Fri, 24 Jan 2020 08:34:31 GMT

Good question it's very hard to find anything on the website about this. I know you can be penalised and not able to claim a deduction if the payments late.

Hopefully someone here can help!

Obligations on new Australian resident earning income from NZ company

RM1 — Thu, 23 Jan 2020 05:59:50 GMT

I am about to become an Australian tax resident having permanently moved from New Zealand six months ago. My NZ employer wishes to continue to engage me for my services, either as a contractor or an employee. The services I provide all relate to personal labour and skills I provide to the NZ company, which derives its income from predominantly NZ clients. If I set up as a sole trader consultant to the NZ company:

(a) what are the NZ company's obligations (if any) to pay the superannuation guarantee into an Australian fund?

(b) would I be entitled to a credit for any amounts of withholding tax withheld by the NZ company under the double tax treaty?

What would be the impact of remaining an overseas employee of the NZ company? In particular what super obligations, withholding tax implications and employee entitlements need to be considered?

(The NZ company does not at this stage wish to set up an Australian subsidiary due to costs and administration time.)

Re: Sole Trader v Employee

macfanboy — Wed, 22 Jan 2020 23:17:15 GMT

Yes, you probably will as the 2nd job won't know exactly how much to tax you.

But you can fill out a PAYG Variation and reduce this amount to a calculated amount.

Re: Tax agreement for receiving salary directly from a client

KylieS — Wed, 22 Jan 2020 20:28:49 GMT

Hi ,

Interesting question. We will do some research and get back to you.

KylieS

Re: Foreign company Fairwork compliance

KylieS — Wed, 22 Jan 2020 20:03:11 GMT

Hi ,

You would be able to get this information from Fair work Australia.

Thanks

KylieS

Re: Sole Trader v Employee

SF76 — Wed, 22 Jan 2020 08:58:45 GMT

Thank you, but initially if I do both jobs as an employee under TFN I'm initially losing more in the tax aren't I? Until I get to tax time and see if I've overpaid tax compared to earnings?

Re: Donations to employees affected by fires

KylieS — Wed, 22 Jan 2020 04:33:18 GMT

Hi ,

Let me check into it for you.

KylieS

Re: Sole Trader v Employee

macfanboy — Wed, 22 Jan 2020 03:20:18 GMT

From a tax point of view, it doesn't really matter as you will be taxed on your total taxable income.

Being a sole trader you may have more deductions available depending on what and how you work.

Donations to employees affected by fires

leannefield6 — Wed, 22 Jan 2020 03:19:29 GMT

We want to gift $1,500 to a few staff that have lost their homes as a result of the recent bushfires. We don't want to disadvantage the person in terms of any govt benefits they receive, we do not want to create a liability for FBT nor do we want to cause an income tax liability for them. Is there a particular way to donate the money to them to create the greatest benefit possible? eg. does the money need to be restricted in use (only for food, essential supplies). We are a charity and have DGR status.

Sole Trader v Employee

SF76 — Tue, 21 Jan 2020 12:31:29 GMT

Hi everyone, please help if you can.
I already have an ABN from past ventures. I currently work casual 2/3 days a week as an employee and have just been offered a second casual job working 2 days a week. With the tax implications on having a second job I'm wondering can I /should I do both these jobs as a contractor and manage my own taxes, Super etc. Being casual I know there is no leave, sick pay nothing so I'm not concerned about that. But I just get so confused reading all the info on hand. I can venture to different places of work being a contractor.
Please in the simplest of terms help me ....or do I stay as an employee at my 3 day a week job and go contacting on the other?

Superannuation Guarantee payments

TashT — Tue, 21 Jan 2020 01:50:04 GMT

Hi,

I have a superannuation guarantee which is due for payment for an employee who has not provided a date of birth or a choice of super fund. The employee only worked for a few days and has provided a TFN, address etc. I have tried to contact the employee several times and have not received any response

As I do not have his date of birth I am unable to make his superannuation payment using the Superannuation Clearing House. How am I able to make the payment if I do not have all of his details?

Re: Contractor versus employee question

Biggiesmalls — Mon, 20 Jan 2020 22:56:29 GMT

Sounds like you've done your research which is great. Have you seen the contractor vs employee tool on the ato website?

https://www.ato.gov.au/calculators-and-tools/employee-or-contractor/

If it seems like your son is working under ABN but should be an employee he will be disadvantaging himself. Although you don't want to ruin your sons chances of getting an apprenticeship you may want to look at different employers if they don't have your sons best interest at heart.

There's more information on the fairwork Australia site that you might find helpful

https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/rights-and-obligations/independent-contractors-and-employees

Foreign company Fairwork compliance

bizuc — Sun, 19 Jan 2020 21:43:12 GMT

Does a foreign company need to comply to Australia's Fairwork policy to pay a resident employee salary? Does it have to pay a minimum wage and be covered by an award or enterprise agreement? Or, is it okay to be paid according to the country the foreign company is based on?

P.S. The foreign company has no presence in Australia.

Re: Second income Help debt payments - Uber

macfanboy — Sat, 18 Jan 2020 23:30:51 GMT

The money taken out from your normal job is not used to immediately repay your debt but held as a credit by the ATO until you lodge your tax return at the end of the financial year.

Once your correct taxable income and repayment income is known any credit that is not needed to pay back any additional tax payable or government debts will then be used to repay the debt. Any surplus or shortfall will then be credit/debit to you.

So any additional income that you earn will require additional Help debt repayments that you will calculate and repay once your total taxable income is known when you lodge your tax return.

Second income Help debt payments - Uber

Aul_well — Sat, 18 Jan 2020 15:36:40 GMT

Hi,
I am considering driving Uber part time to supplement my current income. I currently earn above 90k in my primary job and was wondering if/ how I would need to calculate Help debt repayments on my secondary income?

Re: Tax agreement for receiving salary directly from a client

parev — Fri, 17 Jan 2020 11:51:11 GMT

Hey ,
No, the client isn't directly employing me. My company, which I referred to as my employer as well, employs me as a Software Engineer for their product that they sell to advertising company. So, in my case, now the company will invoice them on their name and forward account number for payment. This income will still be recorded as company income but it will be paid to me directly and be my salary.

Now, as I mentioned, since the payment to my account now will be under the client's name, will it give me any issues later when I show my employment history with my company as it might require me to present my bank statement showing my salary payment?

Thank you for the help.

Contractor versus employee question

Nett — Fri, 17 Jan 2020 00:19:32 GMT

My son is just starting out in the work force and is hoping to secure an apprenticeship. He has been taken on as a contractor for 3 months while they decide. He was asked to obtain an ABN which we went through the procedure and the requirements entered showed he was not entitled to one. The employer however has gone and used his TFN to set one up for him.

Is this legal?

They have advised him he is covered under their insurance but they have not asked him to sign or supplied him with a contract. All research I have done shows he should be classed as an employee not a contractor. How do I go about fixing this? I dont want to runi his chances of getting an apprenticeship but am concerned with him being used in this way. They have also agreed to pay him aset rate of $500.00 per week and he needs to send them a 'work statement' each week. He is currently at the end of his second week and has not received any money.

Re: Contractor paid by a single entity

KylieS — Thu, 16 Jan 2020 21:25:19 GMT

Hi ,

Thanks to for providing that great link.

The other information you may want to look into is related to superannuation whether you are an employee of a contractor. If you are classed as employee the employer is responsible for paying your superannuation. Check out the employee vs contactor tool.

Thanks

KylieS

Re: Employee cents/km paid

TaxedoMask — Thu, 16 Jan 2020 07:19:51 GMT

No PAYG withholding required on this amount as is does not exceed the 66c per km.