Skip to main content Skip to search

Archives for Administration

Federal Budget 2020-21

Federal Budget 2020-21

Early October, Australian Treasurer Josh Frydenberg revealed Australia’s federal budget. It was Australia’s first recession budget in 30 years. And is the first of the next few budgets that will focus on repairing our nation’s economy that has been tattled due to the pandemic we know as COVID-19. The budget details steps to boost the economy after the impact of COVID-19, and has an estimated budget deficit for 2020-21 of $213.7 billion. There are further deficits anticipated over the medium term due to the unprecedented spending in the 2019-20 financial year to support health and livelihoods during the coronavirus pandemic. 

In summary, the budget’s main theme is to focus on jobs and investments, and the steps Australia needs to follow to restore employment. This involves spending measures that will keep businesses afloat, employees working and businesses functioning. Net debt is predicted to reach AU$966 billion (44 percent of the gross domestic product) by June 2024. In addition, the government is expecting unemployment to rise from its current pandemic low to 6.5 percent by June 2022. The new figures expect unemployment to drop to 6.25 percent in 2021-22 and dramatically fall to just 5.25 percent by 2023-24.

Frydenberg has described Australia’s path to recovery as “monumental”, and has stated that personal income tax cuts, infrastructure spending and incentives for business would further to create employment and increase consumer spending.

What does this mean for Australians? 

The road ahead for Australia is going to be a challenging one, however, there is an expectation that the economy will improve more than the government had previously predicted – as unemployment and budget recovers faster than expected. 

In addition, there has been a huge demand for Australian iron ore, primarily from China. The iron ore has recorded its highest selling prices; however, the federal government is playing it safe and not factoring in the potential windfall in its budget recovery. The demand coming from China has been welcomed in the wake of their COVID-19 stimulus package. And also due to Brazil being unable to produce its normal volume for exportation. This has resulted in a temporary boom for Australian iron ore exporters. The Australian Federal Government has opted to manage expectations and assume that the high prices are not a permanent fixture. Frydenberg is unclear on how long the Chinese stimulus program will continue or when iron ore production levels will return to normal in Brazil. 

The 2020-21 budget has also unveiled an increase in aged care spending in the Mid-Year Economic and Fiscal Outlook (MYEFO). This is the third consecutive year that the Federal Government is investing in aged care. In the 2020-21 budget, 10,000 new home care packages costing AU$850 million will be created. This additional investment brings the total number of packages funded to 50,000 since the Aged Care Royal Commission’s interim report was released. It recommended the entire waiting list of about 100,000 be cleared. Australia’s Prime Minister, Scott Morrison has pointed out that the health and wellbeing of older Australians is “an absolute priority”.

What about small businesses? 

Business investment, growth, and consumer spending is one of the key foundations of the Government’s economic recovery plan. There are many measures that affect small and medium businesses – in fact, many medium businesses will transform into “small” businesses for tax law purposes. These mostly come up in the JobMaker section of the Federal budget. 

In summary, here are a few key points that are relevant to small business. 

Instant asset write-off

This instant asset write-off has been one of the key announcements – and is expected to cost Australia AU$27 billion. Essentially, what this means once it passes into law is that small businesses will have the possibility to write off the value of assets purchased until 2022. This is expected to cover 96 percent of businesses. And is an incentive to get businesses purchasing new equipment over second-hand equipment. It also is a marketing opportunity for businesses that supply depreciable assets.

Carry back tax losses

$1.9 billion has been assigned for businesses to carry-back tax losses from 2019-20, 2020-21, or 2021-22 income years to offset previously taxed profits in 2018-19 or later income years.


The JobMaker Hiring Credit is a transition away from JobKeeper. And will target businesses that have been hit the hardest by recent unemployment. The $850 million JobMaker Hiring Credit can be payable to businesses for up to twelve months when they hire individuals between the ages of 16 and 35 years. 

Boosting apprentices and trainees

The Supporting Apprentices and Trainees (SAT) wage subsidy has been extended, which is to keep apprentices and trainees employed. Businesses can claim the new Boosting Apprentices Wage Subsidy for new apprentices. Or trainees and are eligible to be reimbursed for up to 50 percent of the apprentice or trainee wages. The subsidy capped at $7,000 per quarter for gross wages of new apprentices and trainees.


To help businesses invest in technology, the national digitisation plan has been developed to help small businesses use technology. And help fund a national directory overseen by the Australian Taxation Office.  

Mental health

COVID-19 has seen many employers and employees fall into depression as they deal with the pandemic and isolation. The Federal budget has set $4.3 million for Beyond Blue’s NewAccess service to provide mental support for small businesses. Businesses will have the ability to access free of charge telehealth sessions with mental health coaches. 

Changes to Fringe Benefits Tax

  1. Record keeping: Employers will have the possibility to rely on existing corporate records. As opposed to employee declarations to finalise their fringe benefits tax returns. 
  2. Exemption to support retraining and reskilling: The Government will introduce an exemption from fringe benefits tax for retraining. And reskilling provided by employers to redundant. Or soon to be redundant employees – where the benefits may not be related to their current employment.  

If you’re unsure about how the Australian Federal government budget for 2020-21 affects your business, then give us a call at our Eastern Suburbs tax accountant practice. We work effortlessly to understand and simplify all the budget information and assess what your business can be eligible for. RT Taxation can help you focus on your business while you leave the boring tax stuff to us. We want you to have the confidence to run your business while our tax experts work on ensuring you are up-to-date with your tax requirements.

Read more
Pay Your Super on Time

Pay Your Super on Time or Pay the Consequences

This is a reminder that employers need to pay their super guarantee obligations on time. Otherwise, they could be up for significant penalties.  Super guarantee contributions must be made to a complying super fund. Also, retirement savings account within 28 days after the end of the quarter in which the liability arose. See the below table for outlines of key dates. It is important to note that some superannuation funds require monthly contributions.

QuarterPeriodDue Date
11st July – 30th September28th October
21st October – 31st December28th January
31st January – 31st March28th April
41st April – 30th June28th July

Employers who fail to pay the super guarantee contributions by the due date are required to lodge a Super Guarantee Charge Statement. And pay the Super Guarantee Charge (which is not tax-deductible).  This obligation remains even if all the super guarantee contributions were made only a couple of days late.

The penalties for late payment of super guarantee contributions are quite severe and should be avoided at all costs.  There are essentially three aspects to the Super Guarantee Charge:

  • The calculation of the super guarantee shortfall amount
  • How interest is calculated on those amounts
  • The administration fee of $20 per employee per quarter

Shortfall Amount

Normally the super guarantee contributions are calculated on the employees’ Ordinary Times Earnings (i.e., excluding overtime). However when their super guarantee contributions are paid late there is a recalculation of the super guarantee contribution amount.  Super is now payable on the employee’s total earnings (i.e., inclusive of overtime).  This could result in a significant amount of additional super payable if the employees have been working overtime.

Interest Calculation

Under the current Super Guarantee system, interest accrues (currently at 10%) on the super guarantee shortfall amount from the start of the quarter that the super guarantee was not paid on time through to the date that the Super Guarantee Charge Statement is lodged, and the Super Guarantee Charge is paid.  This is probably the most brutal of the penalties for late payment of an employee’s super guarantee contributions:

  • Interest is calculated from the start of the quarter that the super guarantee contributions were not paid on time and as such an employer could end up paying interest for a period prior to a liability arising. For example, if an employee commenced with a business on 15 June 2020 and their super guarantee contributions were paid late, interest would be calculated from 1 April 2020, some two and a half months prior to them commencing employment.  The anomaly does not just apply to new employees but could also apply to employees earning less than $450 in the first two months of the quarter (i.e., where there is no requirement for super guarantee contributions to be made).

    This is like paying the bank interest on a mortgage prior to taking out the loan.
  • Interest is calculated up until the time that the Super Guarantee Charge Statement is lodged. And the Super Guarantee Charge paid, and as such interest will still accrue. Even where the employee super guarantee contributions have been paid, albeit late.  For example, if an employer pays the super guarantee contributions for the June quarter on 30 July (2 days late), interest will accrue from 1 April through until the date that the employer lodges the Super Guarantee Charge Statement and pays the Super Guarantee Charge, which in some instances could be years later.

    Using our home loan analogy this would be like paying interest to the bank after you repay your loan.

 Administration Charge

The administration fee of $20 per employee per quarter may not sound like much, however if you pay 30 employees late, even by 1 day, the administration fee becomes $600.  This is intensified if you are late for several quarters.

Late Lodgement Penalties

As if the above penalties are not enough to get employers to pay their super guarantee contributions on time, there are penalties if the employer fails to lodge a Super Guarantee Statement within the required time frame.  The Tax Office can impose penalties of up to 200% of the Super Guarantee Charge payable for late lodgement of the Super Guarantee Statement. 

Denial of Tax Deduction

Any Super Guarantee Charge payments are not deductible to the employer.  As the late paid super guarantee contributions form part of the Super Guarantee Charge the contributions themselves would be non-deductible to the employer in addition to the penalties imposed.  Paying the super guarantee contributions one day late could mean that an employer is not entitled to a tax deduction for those contributions.

Directors Personally Liable

Directors of a company that fails to meet a Super Guarantee Charge liability in full by the due date cannot hide behind the corporate veil and can become personally liable for a penalty equal to the unpaid liability.

Getting Caught Paying Late

Superannuation funds now report to the Tax Office when they receive super guarantee contributions for employees (including working owners).  The Tax Office is using this information, as well as the information reported through the Single Touch Payroll system, to identify employees who have paid some or all their super contributions late or have not paid the right amount by the due dates.  With this data, matching it is only a matter of when an employer will be caught, not if. 

We are already receiving letters from the Tax Office advising that they have identified employers who may have a Super Guarantee Charge obligation, so it is essential that employers pay their super guarantee obligations on time.

If you need help in ensuring that all Superannuation Payments are made on time and to the right accounts, do not hesitate in getting in contact with the Accountants at R T Accounting & Taxation Services, who will be more than happy to assist you in all your Superannuation needs.

Read more
Small Business Financial Management

Small Business Financial Management

Are you thinking of starting a small business doing what you love the most? Are you feeling overwhelmed with all the financial management, accounting complexities and bits and pieces that need to be ticked off to get your small business off the ground? Starting a small business is an adventure – it involves a big learning curve. And it is easy to get it wrong and make mistakes along the way. You want to build your small business pursuing your new product of innovative service. But have no idea how to how to do financial management and other basics. 

A recent bank study has revealed that eight out of ten businesses struggle with poor cash-flow management. It’s so easy for your new business to fall prey to cash-flow issues. Irrespective of what service or product your small business specialises in. You cannot understate the value of using accountant services for small business. Working together with a specialised accountant service for small business can take care of the more complicated accounting and payroll services for your business. In addition, accountant services for small business can assist you with tax planning and also prepare taxes for your business. Furthermore, your accounting partner can share strategic advice on how you can continue to grow your business. 

When you are running day-to-day operations of your small business, it is highly recommended you outsource to an accounting firm that specialises in accounting services for small business. Researching the right firm for the best fit to you and your business can be a daunting task. Before you can choose the right accountant for small business, it is best to know a few key basics to set up your business for success. 

Understand cash flows

Cash flow is the money that is coming in or going out of your business during certain specified periods of time. Money coming in is classified as positive cash flow. Money going out is classified as negative cash flow. Primarily – you want your business to have a positive cash flow. 

While your business lifts off the ground, you may have more negative cash flow rather than positive cash flow. As you invest in equipment, inventory or marketing. It is important to have a view of how much your cash flow, and a complete understanding of how much money is being spent – and if it is more than what you are earning. 

Meticulous bookkeeping can be challenging for new business owners to upkeep. Outsourcing to accounting services for small businesses can assist you with maintaining a cash flow and can help you understand how your cash flow caries throughout the year. 

Tidy the books

Working together with an accounting service, it is important to have a firm grasp on all aspects of your cash flow and its ongoing success. In addition, establish a method to document moneys earnt and moneys spend. 

It is very helpful having your numbers easily accessible. It allows you to quickly view and track payments, schedule expenditures, and identify your most profitable goods and services. 

Your business can benefit from having an accountant work for you, or outsourcing to an accounting service for small business. If you decide to have an accountant work for your business, it may be difficult to find, recruit and retain knowledge and expertise. Many small businesses chose to work together with an accountant service for small business. 

Tax time

Small businesses that opt for using small business accounting software may perceive that they can eliminate a professional accountant. This is definitely not the case. A professional accountant that offers accountant services for small business can assist you in preparing your taxes and advise you on the correct and maximum advantageous filing. In addition, your professional accountant for small business will ensure you are complying by wage compliance taxes, payroll taxes, and business taxes. 

If you work on your own tax documents, you may save yourself the money of outsourcing to an accountant service for small business. However, when you work with a good accountant, they can use their tax and legislation expertise to suggest ideas on how you can increase your cash flow, decrease costs and even raise capital for business expansion. 

Know government legislations

It can be very difficult dealing with the government paperwork when you are trying to get your business off the ground. Hiring an accountant service for small business can also assist you in coping with more than just your tax returns. They can also help you cooperate with government legislations. 

A good professional accountant service for small business can help you:

  • File all the right legal and compliance documents for your business
  • Ensure your business is up-to-date with the tax laws
  • Update your business status on the government company register
  • Prepare annual accounting reports
  • Record keeping 
  • Manage your payroll – from employee’s tax codes are recorded correctly, paying payroll taxes, and to ensuring payments are processed in a timely matter 
  • Assisting you with record sharing / stock allocation in relation to business partners and equity investments. 
  • Not violate any tax laws. 

The government is always watching small businesses, and it’s best to hire an accountant service for small business before you are audit ever happens. 

Financial options

You may need to invest cask into your business at a point in time. You may find yourself in the situation where you need to find cash “outside” your business – whether it be to cover a short-term cash flow issue or invest in future growth. It’s good to be across the range of financial management options that are available to you. Some of the most common types of financing options for small business include:

  • Bank loans: Your business may be eligible to chose from a variety of loan types, with terms and repayment options that are right for you and your business. If you work together with an accountant service for small business, they can assist you in searching and selecting a loan that will benefit you and your business. In cases where you need money immediately, a short-term loan may be the only answer for you. This may cover payroll or emergency expenses. Short-term loans pose a greater risk, but they can retrieve you from a sticky situation.  
  • Grants for small businesses: A small business grant does not need to be paid back!  There is a catch… Firstly you need to research all the current grants accepting proposals, and you need to meet all the criteria, compile the application and go up against other businesses seeking the same funding. However, if you do win the grant, it’s all yours to use towards your business.
  • Crowdfunding: This is a source of financing that is becoming more and more popular. Crowdfunding is funding a project or venture through asking a large number of people – typically through the internet. A business gaining funds usually offer something in return for a donation to their business. This may be merchandise or exclusive memberships. 
  • Venture capital: Professional investors may want to invest in your business if you have a high-growth potential. Funding from venture capitalists can be a significant sum, and may come with strings attached including the investor wanting a share in the company which may involve a shift in the decision-making power.  
Starting a new business may be a headache, but your business financial management shouldn’t be.

Financial management do require more than just keeping track of your profits – which is why we always recommend you work together and hire a professional accountant service for small business firm. Outsourcing your accounting will empower you to continue working on building your business and your accountant figures out all the numerical stuff. To hire the professional accountants, you need for your business, R T Taxation & Accounting Services. You can take advantage of our Outsourced CFO Services to leave the administrative hassle of running your small business to the experts and for you to do what you know best.

Read more
Eastern Suburbs Payroll Services

Payroll Services during COVID-19

COVID-19 – it has been the most talked about topic of 2020. It has changed our social eco-system and transformed the way businesses work. It is the year where online working finally becomes the norm. Shifting to an online business model has brought forward issues to businesses’ payroll services.

As a small business owner, you’ve had a big year and faced many unprecedented changes to your payroll. There have been measures introduced by the Australian Government. The Fair Work Commission (FWC), and the Australian Tax Office (ATO) to support businesses negatively impacted by COVID-19.  The relief packages have encouraged the retention of staff and aimed to help relieve the cash-flow strain. While all government help is welcomed with open arms, staying up-to-date on all the changes may have become overwhelming for your business and put your payroll in shambles. And making sure that your payroll system is compliant with the latest legislation can prove to be more challenging than pre-COVID-19 Days.

In a perfect world, and during non-COVID-19 times, employees are paid correctly and on time. However, during a pandemic (and 2020), the payroll function quickly breaks down. And when payroll stops, so many other essential business-essential functions stop too. As a result of changing payroll policies, and the introduction of new measures, payroll systems have quickly spiraled out of control and mistakes are occurring leaving business owners confused and trying to find solutions to their payroll problems.

Large enterprises and small businesses can function with a not-so-good payroll function. However, this doesn’t mean that they are functioning correctly, adhering to payroll requirements. What is working today – may not be correct tomorrow. And when payroll mistakes are made, they need to be quickly rectified to avoid hefty Australian Tax Office fines. When the payroll function runs well – it’s almost invisible to businesses, which brings me to my next point… An efficient payroll system.

In 2020, the importance of having an efficient payroll process and a payroll system that allows employees to access remotely is second to none. Payroll in New South Wales has many variants and exemptions. Thresholds are constantly changing, and with the introduction of Jobkeeper, payroll continues to become more complicated. Businesses relying on manual processes may encounter payroll errors and may fail audits from the Australian Taxation Office. In the last month, COVID-19 drove a 400% increase in new regulations impacting payroll globally. That is a lot of new payroll regulations to remember when manually completing your business’s payroll. Here in Australia, there has been misunderstanding around the JobKeeper Payments, Jobmaker eligibility tests, as well as staying on top of workplace entitlements.

When businesses think about payroll, they may be associating payroll with paying employee wages and overlooking the importance of what payroll data can provide for them. According to Deloitte “organisations need open, accurate payroll data to run and analyse current operating models, run scenarios and also know exactly what is going on, to look at how you allocate work, where, at what cost and with how many resources.” Connecting payroll with Human Resources and Finance can directly benefit your business by reducing system complexity and increasing efficiency. Your workplace management costs, including non-compliance fines, payment disbursement, and distribution expenses can also be reduced. In addition, when your payroll is digitalised, your business has productivity advantages and can quickly adapt to changes in the workplace. For example, in the light of COVID-19, a digitalised business can quickly adjust its payroll models and rely on an agile business climatising to changes.

Another aspect often overlooked by businesses when it comes to payroll transformation is the ability to have a real-time view of payroll data. With this kind of payroll view, anyone in your business – from HR to Finance to Sales can gain insights into the business unlocking the ability to make smarter business decisions and business projections.

Payroll planning

Has COVID-19 highlighted the importance of having an up-to-date payroll business continuity plan to aid business activities to continue through a crisis, or support the resumption of business activities once the crisis has lessened? Having an effective business continuity plan can ensure you have minimal impact on continual operations. It also means that you can determine how your business can continue to operate after (and during) a crisis. As a part of a business continuity plan, don’t forget to focus on your business payroll function and processes. Clearly mapping out your payroll processes make changes easier to deploy in times like COVID-19.

When thinking about payroll business continuity, there are seven areas to consider payroll risk and exposure.

  1. Technical infrastructure

It’s time for efficient payroll software that sits in the cloud. Working with the software provider and your payroll team (or external payroll team of tax accountants) be sure to determine if the software is secure, how the systems can be accessed, how easily the software can be customised to fit your business (and how much this will additionally cost), and what kind of costing framework is in place. Is it a subscription or upfront cost?

  1. Responsibilities

Whether you are performing your own payroll activities or you are working with payroll tax accountant specialists, it is important to understand who is responsible for performing payroll activities. Who will update the system with new legislation? Who will check current exemptions are up-to-date? These are just a few question’s that should be raised when mapping out payroll roles and responsibilities.

  1. Office arrangements

During COVID-19, working from home has increasingly become a norm. To ensure that your business is not caught out in a lockdown, ensure that all the key payroll personnel have anywhere access to the payroll system and are equipped to work from home. In addition, ensure to have guidelines around data confidentiality when working away from the office.

  1. Personnel availability

Try to have an understanding of your payroll staff and anticipate how a lack of availability can impact your business. Also, map out how overtime is calculated and works for your business.

  1. Payroll paper processes

No matter how much we try to move to a paperless society, there are physical processes that still exist in the payroll value chain. When you have an understanding of these processes – you can mitigate the effect if there is limited or no physical access to the paper trail.

  1. Bank payment

How are your bank payments released, who is in charge of execution, and what is the process are payment procedures? If there is only one person in charge of this process, it may be beneficial to educate a second stand-in person, in the event that one becomes ill or leaves the business at short notice.

  1. Payroll data

Payroll data is so important to every business. If payroll fails, the business can collapse. Ensure that secure remote access can be guaranteed for key personnel to have access to payment files, pay register, and general ledger files.

Lessons have been learned during COVID-19. There are so many things that need to be considered to continue working at full capacity. Your payroll function is a necessity for your business. It’s not a cost center, but the source of how your business functions. Having up-to-date payroll software will not only benefit your time but also your business. Our Eastern Suburbs Payroll Services work effortlessly to understand and simplify payroll changes and adapt them to each individual business. We can help you focus on your business while you leave the boring payroll stuff to us. Our payroll service consultants can discuss the payroll digital transformation and how your business can benefit from its implementation efficiency. Our aim is to streamline your payroll function and give you the confidence that you’re adhering to all policies and thresholds.

Read more
Taxation Services in eastern suburbs

Top Commonly Forgotten Tax Deductions

  1. Tax Agent Fees are tax-deductible

Did you use R T Accounting & Taxation Services or another tax agent to prepare and lodge your tax return last year? If yes, then great! You can claim the amount you paid last year on this year’s tax return. On your tax return, simply add the amount you paid last year into section D10 – “Cost of Managing Tax Affairs”. The fees you pay for your tax return are always tax-deductible. Of course, if you use R T Accounting & Taxation Services, we will automatically add the expense you paid last year as a deduction for the following year in any estimate.

  1. Union/Membership Fees are tax-deductible

Are you part of a union? How about a membership body related to your profession? If you pay work-related union or membership fees, you can claim the total cost of these fees.

For example, SDA Union fees for Retail, Fast Food & Warehouse Workers are tax-deductible. AHPRA registration costs are also tax-deductible for nurses.

  1. Work-Related Car Expenses

If you are required to use your personal car for work-related reasons, apart from driving to and from work. You can usually claim fuel and maintenance costs as a tax deduction. Things provided your employer has not reimbursed you for these costs and claimed the deduction themselves.

There are two methods for the calculation of this deduction. You can use a 12-week logbook (which generates numbers you can reuse for 5 years) or the cents per kilometer method.

The ATO defines work-related kilometers as kilometers traveled in your car while you are earning your income. The ATO assumes everyone has a workplace they need to travel to, and as a result, that is why kilometers to and from work are not tax-deductible. To be eligible, you must be the owner of the car and the travel must be part of the working day. For example, driving between offices, special trips to the post office or bank, or moving from one job site to another (common for tradesmen). There are special cases in which you can claim kilometers for trips between work and home, for instance, if you are carrying heavy equipment for work, or transporting heavy tools required to do your job. In this case, get in touch with our tax agents who will be more than happy to point you in the right direction.

Each taxpayer is different, so depending on your personal circumstances, either a logbook or the cents per kilometer may be a better method for you, this is why we at R T Accounting & Taxation Services are here to help you choose the method which gets you the largest tax deduction.

  1. Claiming Home Office Expenses

COVID-19 has meant that many employees are finding working from home for the past 8 months. As a result, the ATO brought out a simple 80 cents per hour worked from the home method for calculating home office expenses from 1st March 2020 to 30th June 2020. This is simple enough for the 3-month period. However, what happens when the ATO remove this method and you are still stuck working from home as it has become the new normal to an extent.

The good news is that the ATO allows employees who must work from home occasionally to claim part of their home office expenses. This is most beneficial to those working entirely from home to claim the “occupancy cost” of your home office space as a tax deduction. These expenses include:

  • Software
  • Equipment
  • Furniture
  • Percentage of your rent/mortgage
  • Electricity apportioned appropriately

The details on this can get a bit complicated, so it is a good idea to trust your local registered tax agent at R T Accounting & Taxation Services to help get it right. Just give us honest information and we will take care of the rest to help you maximize your tax refund.

  1. Mobile Phone Tax Deduction

Everyone has a mobile phone these days. But do you use your mobile phone to take and make work calls? Due to ease of access do you call clients or other staff members on your personal mobile phone?

If you answered yes, then you can claim the cost of these calls as a deduction on your tax return. It is important to note that you can only claim the cost of your work-related calls and not your entire phone bill. It is probably wise to keep a logbook or record (for at least 1 month) of when you use your personal phone to determine the average percentage of your calls that are work-related.

For example.

Tom pays $50 a month for his mobile phone plan. He estimates that 50% of his mobile phone calls are work-related. Therefore:

50% of $50 = $25 per month

$25*12 = $300 per year

Tom can claim $300 on his tax return as a deduction for mobile phone expenses.

So, is it worth the trouble to claim the deductions? The short answer is yes.

While individually these items would seem small, added together they could save you a significant amount of money. For example, an extra $600 of deductions on a $50,000 a year income could see an increase in your tax refund of $180.

Get in touch with the registered tax agents at R T Accounting & Taxation Services to maximize your refund and ensure that you do not miss out on any deductions you are entitled to.

Read more
Payroll Services in eastern suburbs

The Power of Payroll

As 2020 ends, there is no doubt that COVID-19 has fast-tracked business transformations. Many retail and hospitality businesses have adapted swiftly to an online-based business model, and even the most traditional businesses have had to adapt to working from home. We have also seen back-office operations designed for previous normal come under the spotlight. Some of these back-office operations were not seen as worthy of transformation in the past but had to adapt quickly in the face of the biggest pandemic to rock the world in the last century. One of the highest risks was in the payroll department.

The threat to morale, bad press, and the regulatory impact of not paying people on time, or even at all was suddenly a real risk that required payroll teams to keep their legacy systems operational. Some organizations had to entirely bypass their on-premises systems and panic run payroll directly through bank accounts, requiring reconciliation of discrepancies at a future date.

What this entire situation has made clear is that transformation to the organization’s payroll departments can not continue to sit on the back burner. If it does, then it becomes far too expensive and inefficient to run. For those organizations still reliant on manual processes, payroll is incredibly prone to error.

Putting the above points aside, payroll continues to get more complicated each year. In the last month, COVID-19 drove a 400% increase in new regulations impacting payroll GLOBALLY. A report released in early 2020 by ADP and The Economic Intelligence Unit showed that three-quarters of businesses surveyed found the regulatory and legislative challenges in hiring, paying, and managing employees internationally increasing in complexity. Within Australia, we have also found there to be complications around the introduction of JobKeeper Payments, Jobmaker eligibility tests, as well as staying on top of workplace entitlements as experienced by Cosmetics Company “Lush” underpaying Australian workers by $4.4 million.

With the Fair Work Ombudsman hot on Lush’s heels, they found that Lush Australia underpaid staff by $4.4 million, including interest and superannuation. Along with this, Lush Australia had failed to provide its employees with a range of entitlements that they were owed. The Ombudsman found that the contraventions were caused by Lush’s inadequate workplace relations systems and processes, including a lack of training for staff and managers, a manual payroll system, and the absence of an HR department in a rapidly growing business. Lush failed to provide its employees with a range of entitlements they were owed including minimum wage rates, rates for weekend and shift work, overtime rates, and allowances. Record-keeping laws were also breached.

In the wake of COVID-19, organizations need to adapt to challenge old ideologies about payroll and stop treating it as a tactical silo. This approach overlooks the simple, but tactical advantages that payroll renovation can bring. For example, by transforming and connecting pay with HR and finance, businesses can reduce system complexity and increase efficiency. They can also reduce workforce management costs, including non-compliance fines, pay disbursement, and distribution expenses. 

Deeply digitized organizations also enjoy real cost efficiency and productivity advantages which can be useful when navigating unchartered waters. Deloitte sums up the need for cost efficiency in their paper ‘Cost resilience amid and after COVID-19, declaring that “To be prepared to face a new crisis such as the COVID-19 pandemic, companies have to swiftly adjust their cost models relying upon a truly agile and scalable business.” 

The Deloitte report also highlights that organizations “…need open, accurate payroll data to run and analyze current operating models, run scenarios and also know exactly what is going on, to look at how you allocate work, where, at what cost and with how many resources.” 

This leads to another overlooked aspect of payroll transformation; by moving away from manual processes, businesses can get a real-time view of their payroll data. This can unlock new insights not only for finance but also for HR teams who will be able to make smarter decisions related to areas such as talent acquisition and retention.

With all these benefits, it is time to take a new look at payroll and see it not as a cost center, but as a source of competitive advantage. Look at our Payroll Services in eastern suburbs to free up your time in the workday to focus on what you do best and leave the paperwork to the experts. Through this, you will see how payroll is a key element of digital transformation and how our structured program will increase efficiencies, enhance visibility, and Agility Company wide. We want you to be ready if the Fair Work Ombudsman comes knocking on your door. Feel confident in our tax expertise and you focus on building your organization to reach new highs.

Read more
Payroll services in the eastern suburbs

Is Working from Home the New Normal?

COVID-19 has much to answer for including for many working people changing the look of their workplaces in the short or long term as many Australian’s found themselves obliged to work from home. For many employers and employees, this was not a change that they had predicted nor one for which any forward preparation had occurred. Many employers and employees, prior to COVID-19 would have denied that their work could be effectively commenced other than in the traditional workplace.

COVID-19, however, forced workplaces to transform and to make working from home a reality. Where it was not possible, such as in retail, people were granted a leave of absence until they could return to their traditional workplaces. Faced with the gulf of work from home or do not work at all, employers and employees recovered, pivoted, and transformed in a way that no one would have predicted. Work from home became a reality.

As we move out of the worst of the COVID-19 shock and reverting to traditional workplaces is possible (subject to COVID-19 safe arrangements), many employers are now facing the challenge of resuming workplace arrangements.  These challenges come in many forms but mainly occur either where employees are opposing returning to the workplace or where employers have found the work from home arrangements advantageous and may not want to return employees to a traditional workplace.

The question, therefore, arises as to who decides if employees continue to work from home or return to the traditional workplace. This is a problematic question, but ultimately the answer is the employer. However, if an employee makes an application for workplace flexibility under the Fair Work Act, it must be assessed on its merits, including where that application is to work some or all their working hours from home. The impact of COVID-19 has made declining such valid flexibility requests more difficult; however, this does not mean that employers cannot decline such requests where there are genuine business grounds to do so.

If an employer wants their employees to return to the workplace, it is generally reasonable and lawful instruction to require employees to do that.  This is particularly the case where the employer has a COVID-19 safe plan in place for their workplace. Employees can not unreasonably refuse to return to the workplace, no matter how much they prefer working from home or believe that they are “better off” working from home. Similarly, employers are not required to allow employees to continue to work from home if that is not how they wish their business to operate.

The ACTU and its affiliated unions are currently preparing a “charter of rights” for working from home.  This will not be an enforceable “charter of rights” but will be endorsed by the Unions as the minimum arrangements that employees should accept/agree to when working from home. This may well create expectations that employers must manage. The details of this charter are not yet known. The Fair Work Commission (FWC) has prepared a discussion document regarding working from home on the assumption that at least a proportion of those employees who were required by COVID-19 to work from home, will continue working from home post-COVID-19 and this may require some changes to existing Modern Award arrangements.

Working from home, in our opinion, is not the new normal. It is however a legitimate option in the mix of workplace flexibilities for the future. The actions of the ACTU and the FWC however suggest that there is likely to be more regulation around working from home in the future. The spirit of this regulation may well determine if working from home in the future is a viable flexibility option for many workplaces. Only time will tell how this area of employment regulation develops.

If you are experiencing any challenges in returning your employees to the workplace or struggling to manage employees in a work from home arrangement, R T Accounting & Taxation Services are here to provide help. Get in contact with one of our members.

Read more
payroll systems in eastern suburbs

JobMaker Hiring Credit: Are You Eligible?

The JobMaker Hiring Credit was brought out in the recent Federal Budget with the aim of accelerating growth in the employment of younger people during the COVID-19-19 recovery. This aims to improve their economic, health, and social outcomes and reduce the scarring from long term unemployment.

From 7th October 2020, eligible employers will be able to claim $200 a week for each additional employee they hire aged 16 to 29 years old; and $100 a week for each eligible employee aged 30 to 35 years old. New jobs created until 6th October 2021 will attract the JobMaker Hiring Credit for up to 12 months from the date the new position is created.

To be eligible, the employee must have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one of the previous three months at the time of hiring. The JobMaker Hiring Credit will be claimed quarterly in arrears by the employer from the Australian Taxation Office (ATO) from 1st February 2021. Employers will need to report quarterly that they meet the eligibility criteria.

The Additionality Criteria

To attract the JobMaker Hiring Credit, the employee must be in an additional job created from 7th October 2020. To demonstrate that the job is additional, specific criteria must be met. The additionality criteria require that there be an increase in:

  • the business’ total employee headcount (minimum of one additional employee) from the reference date of 30 September 2020; and
  • the payroll of the business for the reporting period, as compared to the three months to 30 September 2020.

The amount of the hiring credit claim cannot exceed the amount of the increase in payroll for the reporting period. Total employee headcount on 30 September 2020 and payroll in the three months to 30 September 2020 represent the baseline values for the employer. The baseline headcount will be adjusted in the second year of the program to ensure an employer can only receive the JobMaker Hiring Credit for 12 months for each additional position created.

Employer Eligibility

Employers are eligible to receive the JobMaker Hiring Credit if they:

  • have an Australian Business Number (ABN)
  • are up to date with tax lodgement obligations
  • are registered for Pay As You Go (PAYG) withholding
  • are reporting through Single Touch Payroll (STP)
  • meet the additionality criteria
  • are claiming in respect of an eligible employee and
  • have kept adequate records of the paid hours worked by the employee they are claiming the hiring credit in respect of.

Newly Established Businesses

Newly established businesses and businesses with no employees at the reference date of 30 September 2020 can claim the JobMaker Hiring Credit where they meet the criteria. The minimum baseline headcount is one, so employers who had no employees at 30 September 2020 or who were created after this reference date will not be eligible for the first employee hired, but will be eligible for the second and subsequent eligible hires.

If the JobMaker credit is something you feel your business is eligible for do not hesitate in getting in contact with your local Registered Tax Agent at R T Accounting & Taxation Services, and a member of our team will get in contact with you.

Read more
ATO Restarts Compliance Programs

Australian Tax Office Restarts Compliance Programs

The Australian Tax Office (ATO) has warned businesses not staying up to date with their obligations. It may impact their eligibility for future stimulus measures. Also, ATO readies to recommence its work to address key risks to the Tax and Superannuation system.

The ATO has indicated that it will continue to focus on implementing government stimulus measures. Then including those announced weeks ago in the Federal Budget, it will shortly recommence its work to address the key risk to the Taxation and Supersystem.

Businesses doing well will need to resume their obligations. Those facing ongoing hardship are encouraged to get in contact with their Registered Tax Agent so they can notify the ATO accordingly. It is tough for the ATO to identify exactly who is still impacted on ongoing communication will be critical to ensure compliance is met and any future stimulus measures are received.

The ATO stopped providing blanket extensions to small business audit cases in early September. They have recommended activity where the business is either not adversely affected by COVID-19 or are now able to progress.

Scammer Alert

It is important for clients to remain vigilant of any callers pretending they are from the ATO, demanding money to be paid in full immediately. There has been an increase in reported cases of these scammers taking advantage of those most vulnerable during these times.

The Australian Tax Office will generally not call the taxpayer demanding immediate payment of any tax debts or liabilities nor would accept payment in the form of gift cards.

Scammers often try to ‘phish’ for information by impersonating government agencies such as the ATO.

If you hand over your information, scammers might use it to:

  • drain your bank account
  • establish fake businesses in your name
  • gain access to your online government services
  • scam your clients and employees.

Scammers have many opportunities to trick you into giving away your valuable information.

There are some things your business can do to help stay safe:

  • use complex passwords and change them regularly
  • remove system access for people who no longer work for you
  • log out of systems and lock computers when you are not using them
  • maintain up-to-date security and anti-virus software on computers and other devices.

There are also some things you can do to stay safe when you are dealing with government services online:

  • do not access services via a hyperlink in an email or SMS
  • access services through an independent online search
  • if you are ever in doubt, look up the service’s phone number separately and call them to check.

Unless you have heard anything different from your Registered Tax Agent, you should not engage with any of these scam calls.

If you have been in contact with any of these callers, it is important that you get in touch with the Police and cancel any card information you may have given to the given.

Read more
tax accountants in eastern suburbs

Does Your Business Qualify for Tax Concession – RT Taxation

One of the most beneficial tax concessions available to a small business owner is the 15-year exemption under the small business Capital Gains Tax (CGT) concessions.

Basically, business owners who meet the following criteria can sell a business asset tax-free, with the option to contribute up to $1.565million of the gains into superannuation.

These rules state the business owners who can qualify and those who cannot. It is a tough result for those that barely miss out on the tax concessions. Your business ownership structure and your profit distribution decisions here could determine whether you can access the concessions or not. It is important to be alert to the legislation and plan accordingly.

5 qualification criteria for a business owner:

  1. There is a sale of a business asset (not share or trust interest) for a gain.
    1. For example, the goodwill of a business, or a business warehouse or office location (office location more pertinent in the current situation as more businesses opt for a remote workforce)
  2. Either
    1. The business owner, and its related entities, must have an aggregates turnover of less than $2 million or
    2. The net value of the assets of the business owner, including related entities must not exceed $6 million. This excludes personal use assets, including your family home or your superannuation
  3. The business asset must be owned continuously for the 15 years leading up to the sale
  4. If the sale is made by a company or trust; that entity must have had a significant individual. This means, there must have been an individual holding at least 20% interest in the entity for at least 15 years
  5. At the time of the sale, the individual seller, or significant individual of the entity seller, must be aged 55 years or over and the sale is made in connection with the business owner’s retirement.

It is important to note that where the asset is sold is a share in a company or interest in a trust, the exemption may still be available, but the rules become very complicated and you will need to work through the structure to ensure there is sufficient participation in the business by the owner and the entity in which the shares are sold satisfies additional conditions in relation to annual turnover or net business assets. For example, the owner must have a minimum of 20% interest in the entity. It is also important that the rules become even more complicated if there are two layers of ownership, for example, the common structure of a trust owning a company.

This potentially large tax concession has very specific rules attached which must be astutely assessed. If you would like more information or require assistance in determining your eligibility, please get in touch with one of our best tax accountants in eastern suburbs, who will be happy to assist you.

Read more