Australia Payroll 2019-2020 Updates
Changes to payment summaries
Employers are now required to report or lodge their employees’ income, tax and super information directly to ATO. Employers using a registered tax agent to prepare their income tax return don’t need to act as your agent will manage your duties on your behalf.
From 1 July 2019, health insurers do not need to send their members an individual health insurance statement. It is now optional for insurers to submit such a report each year. Also, if employers lodge their tax return online with ‘myTax’ or a registered tax agent, the employee’s health insurance tax information should be pre-filled in their tax return by 20 July.
The government’s Personal Income Tax Plan, as announced in the 2018-19 Federal budget, has been passed by Parliament
The changes taking effect from the 2018-19 income year include:
1. An increase to the top threshold for the 32.5% bracket from $87,000 to $90,000
2. Introducing a new low- and middle-income tax offset (LMITO) for those who are eligible
a) Employees/Employers don’t have to do anything to receive this offset as the ATO systems will calculate the data and apply/adjust the LMITO (if applicable) on employees’ income tax once lodged.
b) LMITO won’t reduce the amount of tax withheld from an employee’s pay.
c) This change also means that if employees are eligible for the existing low-income tax offset, they will also receive this new LMITO.
With further development on the 2019-2020 budget statement, LMITO has increased from a maximum amount of $530 to $1,080 per annum, and the base amount has increased from $200 to $255.
What more we need to know about our Australian payroll? Is there any cost and administration curbing for employers? Well, let see …
Fringe benefits tax (FBT) instalment
Fringe benefits tax (FBT) is tax employer pay on certain benefits provided to employees and families or other associates. The benefits may be in addition to, or part of, salary or wages packages. FBT is calculated and managed separately from income tax.
Employers who are required to pay FBT of $3,000 or more in the past financial year will need to lodge their BAS and pay quarterly. So, what could fall under fringe benefits? Like the UK, Australia has specific items that could fall in the category of fringe benefits – such as
1. Using a work car for private purposes
2. Discounted loans to employees
3. Gym memberships to employees
4. Entertainment by way of free tickets to concerts
5. Reimbursing an expense incurred by an employee, such as school fees
6. Giving benefits under a salary sacrifice arrangement
Payroll Submission Deadlines
Employees should have their P60 equivalent by the 14th of July and PAYG annual report lodged with the ATO by the 14th of August. Payroll would need to submit the annual tax return by the 31 October. As an individual or business, if you expect a tax bill, don’t delay lodging. If you’re finding it hard to pay on time, it’s crucial to contact ATO asap so they can support you with a tailored payment plan. Please note that even if employers are late with their data submission and the deadline has passed, it is essential to lodge as soon as they can – notifying ATO about the delay and avoid late penalty fees.
We offer a free consultation. Watch out for our 2019-2020 international payroll workshops dates in our next blogs. Contact us: www.VPEF.co.uk and Email: firstname.lastname@example.org