As each new tax year ticks over, all small businesses should review that they are meeting their obligations as an employer.
Getting employee entitlements wrong is one area where the ATO takes a very dim view of mistakes.
The ATO recently estimated that there was $17 billion of super missing in taxpayer accounts over a six year period.
Most of this was due to non-payment or under payment from employers.
Those businesses who have been through a superannuation or PAYG audit will attest that the ATO puts them through a very thorough and exacting process.
As with most things, an ounce of prevention is always better than implementing a cure after the event.
Affinitas Accounting encourages that all small businesses take the time to review the following payroll information on a regular basis. The following steps should give you a good place to start.
1. Have you applied the Annual Wage Increase handed down by the Fair Work Ombudsman (CPI)?
This increase is generally handed down on July 1 each year. On July 1, 2018 the Annual Wage Increase was 3.5% for a new weekly minimum wage of $719.20 per week.
2. Have you applied any wage increases for junior employees?
3. Has there been any wage movement for employees under a traineeship or apprenticeship?
4. Have you been keeping yourself up to date with any changes within your employees’ award?
5. Is your employee record keeping up to date?
6. Do you have a record of accrued annual leave/sick leave/long service leave? Are these being kept up to date?
7. Have you been paying your superannuation guarantee (SG) on time?
8. Do you have an employee agreement?
Note: An employee agreement is not necessary but they generally are considered good practice.
Audit insurance will protect a business from the fees involved in answering an ATO audit, which can run into many thousands of dollars even if you have no breaches.
The insurance will not, however, save you from any fines or penalty interest. And if you are deemed to have deliberately ignored your superannuation obligations and SGC paperwork then audit insurance may refuse to cover you.
Information on your obligations as an employer also can be found on the FairWorks Ombudsman website https://www.fairwork.gov.au.