Monthly Archives: July 2022

STP Information

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What is STP?

STP (Single Touch Payroll) works by sending tax and super information from your STP-enabled payroll or accounting software to the ATO as you run your payroll.

You will:

  • run your payroll
  • pay your employees as normal
  • give them a payslip.

Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly.

Your STP-enabled payroll software will send a report to the ATO which includes the information, such as:

  • salaries and wages
  • pay as you go (PAYG) withholding
  • super liability information.

If you have 20 or more employees, you should be reporting closely-held (related) payees each pay day along with arms-length employees. The finalisation due date for closely-held payees is 30 September each year. A ”closely-held (related) payee” is an individual directly related to the entity from which they receive payments (for example, family members of a business, directors or shareholders of a company, or beneficiaries of a trust).

For small employers (19 or fewer employees) who only have closely-held payees, the due date for end-of-year STP finalisation will be the payee’s income tax return due date.

For an employer with a mixture of both closely-held payees and arms-length employees, the due date for end-of-year STP finalisation for closely-held payees is 30 September each year.

All other employees are due 14 July each year.

Before making your finalisation declaration, make sure your STP information is correct. If you can’t make a finalisation declaration by the due date, you will need to apply for a deferral.

If you have any requirements here – de Kretser can take them up for you.

You may finalise your data earlier if it’s ready. The sooner you finalise your employees’ information, the sooner they will be able to lodge their tax returns for 2021/22.

This finalisation process is explained in detail in the STP employer reporting guidelines, including amendments for current and previous financial years. As noted, we can assist you in this process. When you have reported and finalised your employees’ information through STP, you are exempt from:

■ providing payment summaries to your employees

■ lodging a payment summary annual report.

For payments to your employees that were not reported through STP, you still need to:

■ give a payment summary to your employees

■ provide the ATO with a payment summary annual report for these payment summaries.

If you identify that you need to make an amendment after you have submitted a finalisation declaration, you’ll need to submit these as soon as possible.

You can make the amendments to finalised STP data in your STP solution. The ATO recommend you tell your employees when you make an adjustment that will be reflected in their income statement. If they have already lodged their tax return they may need to lodge an amendment.

You will need to tell your employees:

■ you are no longer required to provide them with a payment summary for the information you’ve reported and finalised through STP

■ they can access their year-to-date and end-of-year income statement online through myGov or talk to their registered tax agent

■ ‘income statement’ is the new term for their payment summary (if they don’t already know this from last year)

■ to wait until their income statement is ‘Tax ready’ before lodging their tax return

■ to check their personal details and if necessary, update with both you and the ATO (incorrect personal details may prevent them from seeing their STP information). If an employee does not have a myGov account, they can easily create one online.

They can also talk to the de Kretser team who can easily access your required statement information, and assist you will all you need to satisfy this business necessity.

To stay and informed and connected, follow us on LinkedIn and Facebook

This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to
know. Should you require further information on any of the topics covered, please contact us via the details below.
T: +61 3 9550 6900 E:admin@dekretser.com.au

Superannuation simplified for your business – in 2022/23

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Here at de Kretser – our team have compiled a simple guide to help your business with it’s Super responsibilities in the new Financial year.

You will have heard by now that business Superannuation contribution in Australia has increased to 10.5%  

The Superannuation Guarantee (SG) rate will rise from 10% to 10.5% on 1 July 2022 and will then steadily increase by 0.5% each year until it reaches 12% on 1 July 2025 – the following numbers tell the story –

PeriodSG rate (%)
1 July 2015 – 30 June 20169.5%
1 July 2016 – 30 June 20179.5%
1 July 2017 – 30 June 20189.5%
1 July 2018 – 30 June 20199.5%
1 July 2019 – 30 June 20209.5%
1 July 2020 – 30 June 20219.5%
1 July 2021 – 30 June 202210%
1 July 2022 – 30 June 202310.5%
1 July 2023 – 30 June 202411%
1 July 2024 – 30 June 202511.5%
1 July 2025 onwards12%

The increase to the superannuation guarantee (SG) rate begins from 1 July 2022 and will see more employees (and certain contractors) entitled to additional SG contributions on their pay.

If you have employees, what this will mean depends on your employment agreements.

If the employment agreement states the employee is paid on a ‘total remuneration’ basis (base plus SG and any other allowances), their take home pay might be reduced by 0.5%. That is, a greater percentage of their total remuneration will be directed to their superannuation fund.

For employees paid a rate plus superannuation, then their take home pay will remain the same and the 0.5% increase will be added to their SG payments.

But what happens when income earned before 30 June is paid after 30 June 2022 – will employees be entitled to the higher SG rate of 10.5%?

SG based on when an employee is paid

On 1 July 2022, the SG rate increased from 10% to 10.5%. In some cases, an employee’s pay period will cross over between June and July when the rate changes.

However, the percentage employers are required to apply is determined based on when the employee is paid, not when the income is earned.

The rate of 10.5% will need to be applied for all salary and wages that are paid on and after 1 July 2022, even if some or all of the pay period it relates to is before 1 July 2022.

This means if the pay period ends on or before 30 June, but the pay date falls on or after 1 July, the 10.5% SG rate applies on those salary and wages. The date of the salary and wage payment determines the rate of SG payable, regardless of when the work was performed.

EXAMPLE

Nicholas is an employee of ABC Pty Ltd.

If Nicholas performed work:

  • In June (or partly in June and partly in July) but he was paid in July, the SG rate is 10.5% on his entire payment and contributions totalling 10.5% of his ordinary time earnings for the September 2022 quarter must be made to his superannuation fund by 28 October.
  • In July but was paid in advance (before 1 July), the SG rate is 10% and contributions totalling 10% of
    his ordinary time earnings for the June 2022 quarter must be made to his superannuation fund by 28 July.

Please also note the following changes to the SG Threshold

$450 super guarantee threshold removed
From 1 July 2022, the $450 threshold test will be removed and all employees aged 18 or over will need to be paid superannuation guarantee regardless of how much they earn.
It is important to ensure that your payroll system accommodates this change so you do not inadvertently underpay superannuation.
For employees under the age of 18, super guarantee is only paid if the employee works more than 30 hours per week.

If you have any questions regarding your Super obligations – de Kretser is here for you.

Need more information?
There are many factors to consider regarding the information shown above. Please contact us if you would like more information, we are happy to explain and action your requirements.

We look forward to working with you.

T: +61 3 9550 6900

E:admin@dekretser.com.au

This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to
know.

To stay informed and connected, follow us on LinkedIn and Facebook