We are frequently approached with enquiries about the obligations businesses must fulfil when hiring personnel. If you are running a business and hiring staff, it is crucial to understand the multitude of responsibilities you must meet. This holds true for accountants in Sydney as well. Below, we outline your responsibilities as a business owner employing staff.
Pay and employees entitlements
The Fair Work Commission is responsible for the National Employment Standards and minimum wage. Employers must ensure that they are paying their employees correctly. Proper entitlements, including sick leave, annual leave and long service leave, need to be provided and tracked for the employees. More information on the employee’s entitlements can be found at the following website: https://www.fairwork.gov.au/employee-entitlements/national-employment-standards.
It is also legally required to provide employees with payslips for the relevant pay period.
Employers are legally required to maintain a safe workplace and ensure the health and safety of their employees. This can sometimes be difficult for employers to manage when employees work from home. The regulations differ in each state, but there are penalties for not meeting your WHS obligations. For more information, please go to https://www.safeworkaustralia.gov.au.
Pay As You Go Withholding (PAYGW)
Employers must deduct PAYGW tax at source from employees’ wages and send the tax for all employees to the tax department (monthly if tax is over $25,000 pa, quarterly if < $25,000). Payment summaries must be completed and given to employees within 14 days of year-end or when they leave your employment.
A state government tax was levied on employers’ payrolls over $750,000 (in NSW). Tax is 5.45% for every dollar of wages above $750,000 pa, usually charged monthly. Contractors, even set up as a company, can be included as “wages” for payroll tax purposes. Please note superannuation contributions are also included in wages for payroll tax purposes.
Worker’s Compensation Insurance
The employer must legally insure all employees against work-related injury. This should be organised through an insurance broker. Rates vary depending on the risk involved in the job.
By law, employers are required to pay superannuation for most of their employees. On 1 July 2017, the pay rate was 9.5% of the employee’s wage. From this date, the contributions must be forwarded to the fund quarterly.
Fringe Benefits Tax (FBT)
When an employer provides benefits to their employee in place of salary or wages, FBT may be payable. Expected fringe benefits are motor vehicles, car parking, low-interest loans and discounted goods. There are some tax advantages available for sure concessionally taxed fringe benefits. Most fringe benefits must be reported annually on an employee’s payment summary.
If you have any questions or want to know more, please do not hesitate to contact us.
Kreston Stanley Williamson Team
*Correct as of October 2017
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.