Payroll Management for Australian Business

Payroll taxes in Australia work on Pay as You Go (PAYG) basis and depends on the regulation of the state and territory where the business or its employees work. While some of the administrative payroll tax are consistent in states and territory, but mostly, each state and territory follow their set regulation for administration.

For an individual over the age of 21, the basic wage in Australia is AUS$13.74. The maximum hours of work are 38 ordinary hours per week. The Employees are responsible for mandatory participation in “superannuation “. Besides superannuation, PAYG, Fringe benefits tax, payroll tax and single touch payroll are the other requirement of the Australian Tax office‘s payroll tax obligation.

What are the business obligation of the Australian Firm for payroll reporting?

Australian business calculates payroll taxes on the income paid or payable by them to its employees. The assessment of payroll tax and its relevant tax arises when the wages reaches a specified threshold limit. The Australian payroll tax is paid by the employer on behalf of its employee by withholding a certain part of employee’s salary or wages based on the applicable rates after each pay period.

The Australian Tax office (ATO) requires a business to submit the following -

1. Business Activity Statement- monthly, quarterly or annually.
2. Pay Goods and Services Tax(GST)
3. Pay as You Go(PAYG) instalments.
4. PAYG withholding Tax
5. Other tax obligation.

Business in Australia must use the correct application of tax rates based on the rates on awards, hours and more.

Types of payroll taxes

1. Payroll tax - is a state tax on the salary or wages, you pay to employees. It is a tax on the wages paid per month and is payable only if the total wages exceed the exempted threshold limit of the relevant state or territory. The rate of tax may vary according to the state and territory.
2. Pay as You Go (PAYG) instalment - It is regular instalment payable on the expected annual income tax liability of the business if your business or investment income exceeds a certain specified amount. Besides PAYG, you also need to file an annual tax return. The period for filing the tax is 1st July to June 30 of the consecutive year.
3. Fringe Tax benefit - If a company, apart from the salary or wages provides additional benefits such as car allowance, insurance, travel etc. to their employees including their family or other associates then the employer has to pay tax on such fringe benefits. They must file fringe benefits tax with ATO.
4. Single touch payroll - Tt is a new regulation came into effect as on July 2019, for small business with less than 20 employees for reporting of payroll activity to the Australian Tax Office (ATO). They need to report this information after each payday in a specified format digitally.

How does Accounts Junction help in handling payroll taxes?

Accounts Junction has established itself as a global accounting firm incorporated in various countries all over the world. We can help you to handle all your payroll obligation in a hassle-free so that you can focus more on your business. We have an experienced and quality people on board apt in working in various accounting software such as XERO, SaaS and MYOB. This software is extremely useful for submitting your payroll taxes directly to the ATO in the specified format.