Balance Up June 22

‘Balance Up’ Newsletter

For owners & bookkeepers to keep their business books up to date

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June 2022

End of financial year is upon us. I hear some of you say ‘yippee’ and others ‘oh-no’. Regardless of which camp you sit in we are here to help.

Here are a few things you need to know and some reminders so all of your bookwork can be completed and ready to start FY23.

KELLY GRAY

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Important Payroll Changes Superannuation on the rise Superannuation will increase from 10% to 10.5% as of 1 July.

As part of the Government’s gradual increase to the rate of employer sponsored superannuation, the rate applicable from all payruns created from 1 July will be 10.5%. Most payroll software (Xero, QBO, KeyPay) will automatically apply this change to the rate, however you should double check this to ensure the correct super is allocated.

NB: If you are paying your staff early in July and it includes time worked from June, the entire pay will have the new rate of 10.5% applied.

Looking ahead, the SG rate will increase by .5% every year in July, until it reaches 12% from 1 July 2025.

Minimum threshold to be abolished The superannuation minimum earnings threshold currently set at $450 per month (or $350 for hospitality) will be abolished meaning employees are required to have superannuation paid from the first cent they earn. Special rules apply for employees aged under 18 (superannuation is payable if they work more than 30 hours in a week, regardless of how much you pay them). Once again, most payroll software systems will automatically apply this change in their end of financial year update, however you should watch out that the correct rules are being applied when you calculate your super contributions.

Contractors to recieve superannuation Superannuation will also need to be paid to contractors: If you pay contractors mainly for their labour, they are employees for superannuation guarantee (SG) purposes,

and you may need to pay Super to a fund for them. It doesn’t matter if the contractor has an Australian business number (ABN). If you are not sure if they are a contractor or employee please use the Employee vs Contractor tool https://www.ato.gov.au/calculators-and-tools/employee-orcontractor/

Deadline looms for Single Touch Payroll Single Touch Payroll Phase 2 has been gradually coming into effect this year as software providers have been upgrading their systems. The final date for implementation of this new reporting regime is December this year – however many software systems are already capable so you should check with your software provider to see if STP 2 can be adopted.

The major change with STP 2 relates to the additional reporting categories that must be applied to pay items. This will change the nature of reporting for some employees, especially where deductions, allowances, overtime or other payroll extras are involved.

We will assist all of our payroll supported clients with these changes – if you currently manage your payroll yourself and need help or guideannce with any aspect of these changes or your payroll, please give us a call or send an email:

betterbooks@phillipsons.com.au

Director Identification Numbers...

Do you need one?

You may have heard about the new rules which require directors of Australian companies to obtain a Director Identification Number (director ID).

The new requirement to obtain a director ID also applies to individuals who have an SMSF with a corporate trustee, which is why we wanted to bring this new requirement to your attention. All directors of your corporate trustee will need to apply for their own director ID by the prescribed deadline.

An application for a director ID must be made individually and only by those who are applying for the director ID. As you are required to prove your identity as part of the process, our firm, or any other third party, is not able to apply for a director ID on your behalf.

What is a Director Identification Number?

A director ID is a unique identifier that directors need to apply for, like a tax file number. Directors of ALANNAH BOYD multiple companies only need one director ID, to be will be used across all companies.

A director ID is kept forever even if the director changes companies, resign from the director role(s), changes name, or moves overseas.

Why do directors need a Director Identification Number?

As part of the Government’s Digital Business Plan, it is rolling out a Modernising Business Registers program which includes the introduction of director IDs. The main purpose is to prevent the use of false or fraudulent director identities but it will also improve the efficiency of the system making it easier to meet registration obligations and trace director activity and relationships. By improving the integrity and security of business data it is expected to reduce the risk of unlawful activity.

How to apply for a Director ID Step 1: Set up myGovID. If you do not already have a myGovID you will need to before you can apply for your director ID online. You can find information on how to setup your myGovID by downloading the app https://www.mygovid.gov.au/set-up

Step 2: Gather your documents You will need information that the ATO already knows about you to verify your identity. You will need your tax file number, your residential address held by the ATO and information from two of the following documents: • Bank account details • ATO notice of assessment • Super account details • Dividend statement • Centrelink payment summary • PAYG payment summary Most of this information can be downloaded from your myGov account so it may be worthwhile linking to this service ahead of applying for your director ID. Note: myGovID is different to your myGov account. Your myGov account allows you to link to and access online services provided by the ATO, Centrelink, Medicare and more, while myGovID is an app that enables you to prove who you are and to log in to a range of government online services, including myGov.

Step 3: Complete your application Once you have a myGovID and information to verify your identity, you are ready to apply for your director ID. You can click on the following link to start the application process. The application process is quick and should take you less than five minutes. https://abrs.gov.au/persons/ui/secure/start/applyForDirectorID?action=applyfordirectorid Further information about the application process, and step-by-step instructions, can be found here: https://www.abrs.gov.au/director-identification-number/apply-director-identification-number

Deadline is 30 November Reach out to us if you need further information. Although we are unable to apply for a director ID on your behalf, we would be more than happy to guide you through the process.

betterbooks@phillipsons.com.au

Helping you prepare for the end of the financial year Your checklist •

Check your accounts recievable (debtors) to make sure any amounts that are not going to be collected are written off.

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Remember to finalise your STP reporting after the final pay for June has been processed. This will ensure your employees automatically receive an annual summary so they can prepare their income tax return for 2022.

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Reminder to check with Fairwork to ensure staff are being paid at correct rates – see Fairwork calculator https://calculate.fairwork.gov.au/findyouraward There has been much publicity surrounding the increase to minimum rates and Fairwork will issue new pay guides once these changes are confirmed. This may not happen early enough for the first payrun in July, so prepare to backpay any staff impacted by the increase in minimum rates.

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For those with stock (livestock, goods for resale, bar stock etc) please ensure you do a stocktake on 30 June or as near to that date as possible.

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Make payment for all superannuation contributions before the end of June (most funds suggest 21 June, but at least make sure that the funds have left your bank account prior to the end of the month) to be able to claim the full deduction – otherwise it becomes a deduction for next financial year.

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Complete the reconciliation of remuneration for Workcover and update estimates for the new financial year.

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Get ready to report your Taxable Payments Annual Report for all contractor payments made during the year (only applies to certain industries).

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For larger employers, submit your Payroll Tax Annual Return by 21 July.

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Gather your bank statements and other records for the end of year and get them ready for tax time 2022.

Contact us: Phillipsons Phone: Email: Web: To unsubscribe:

Accounting Services

03 5144 4566 betterbooks@phillipsons.com.au www.phillipsons.com.au queries@phillipsons.com.au

Visit https://phillipsons.com.au/our-people/ to find out more about your BetterBooks team: Alannah Boyd, Andrea Killeen, David Jacobs, Donna Bailey, Felicity Tatterson, Kelly Gray, Kylie Higgins, Liselott Webster, Michelle Huggins, Rochelle Gunther, Selena Langstaff.

betterbooks@phillipsons.com.au