Skip to main content Skip to search


Payroll services

Prepare your payroll services for the future

Bushfires, floods, blackouts, cyclones, and infectious diseases are disasters that have brought Australia and the world to a halt in 2020. These disasters also impact businesses and interrupt work. COVID-19 has put pressure on many small businesses and has caused business owners to be challenged and finding solutions on how their business is to function through a pandemic. Unfortunately, when business owners operate reactively, they have no effective disaster recovery and business continuity plan. This impacts the payroll services significantly, as employees are left without wages, taxes unpaid, and leave entitlements undistinguishable. During any disaster – the payroll function is always a critical service to a business. In fact, COVID-19 has brought to light how payroll business continuity needs to be at the forefront of business planning. Business owner’s need to consider payroll as a business necessity, its importance (whether your business utilizes external partners or has an in-house payroll team), how prepared all stakeholders involved with payroll are, security management, and how to mitigate the effects of any natural disaster or pandemic can have on their business. 

How to avoid a disastrous failure

You can’t expect that in one year, so many unexpected situations would hit our borders. Yet here we are, twelve months into a year where we have seen so much heartache and our work-life has become intertwined with our home-life. Having a contingency business payroll plan in place is crucial for your business, and is key to your business surviving years like 2020. The aim of developing a contingency plan is to minimise disruptions to payroll processing. After all, employees still need to be compensated and taxes paid. 

A well planned out payroll continuity plan can be the deciding factor whether your employees are paid on time or not at all. A payroll services continuity plan identifies events/disasters that may affect your company and has details on how your people can respond and recover from these pressures. 

As a business owner, you may feel that investing time into a payroll continuity plan may not be valuable for your business. However, even a simple and straightforward list of policies and processes to follow is useful for your payroll teams to continue functioning in times of crisis. While all businesses – small, medium, and large enterprises are impacted by business interruptions, smaller businesses may not have the ability to recover from a crisis.  

Payroll contingency planning isn’t just for major disasters and pandemics; it also covers you for technology outages, loss of data, changes to legislation, and minor errors that occur in your business-as-usual operations. Payroll continuity plans will have you examine your business and how it adapts to changes in the marketplace, risk management, and disaster recovery. A payroll continuity plan will be specific to your business needs and will ensure that your staff is still receiving their salaries. Your payroll contingency plan will focus on how your people (stakeholders involved to complete payroll tasks), technology, and processes needed to complete payroll tasks. 

Below are some areas that need consideration when examining your payroll risk exposure and assessing the payroll function continuity readiness. Having a clear plan and answers to specific questions will help you build a resilient payroll function – ready to attack any crisis that come their way.

  1. Payroll organisation 

Who is responsible for completing your payroll activities, and how are they performed? Are they working on paper or using software (cloud-based or desktop software)?

  1. Staff capabilities

Are your payroll staff qualified and up-to-date on the latest regulations and technology? 

Are there arrangements and specifications in place that cover overtime and limited staff availability? 

  1. Working in-office or offsite

Do your employees need to be working on site or can also function offsite?

Are they equipped with the right tools and hardware (laptop, internet, safe working spaces, remote access to applications, etc.)?

  1. IT infrastructure

Is your IT infrastructure secure?

What are your infrastructure weaknesses? 

  1. Processes

Does your payroll value chain have physical processes that cannot be eliminated? 

If access is not available, how will the impact be mitigated? 

  1. Access to payroll data

Can your employees access the payroll system remotely and is this secure?

Are your monthly files up-to-date, and are files, pay-slips, pay register, and other payroll files readily available for employees to access? 

Outsourcing your payroll services

Payroll is a business necessity. Being sloppy with your payroll function, not adhering to legislation, and not paying your taxes can get you and your business into a lot of trouble. Hefty fines are involved and, in some states, – it is a felony. 

Outsourcing your payroll to an experienced vendor is an effective way to protect you and your business against any crisis that may come your way. It will also ensure that your payroll continues to function and is protected against anything that can threaten payroll delivery. Outsourcing to a tax and payroll partner can minimise your software, staff, and training costs. They are experienced and mitigate risk with their dedicated teams of experts. They focus on your payroll, saving you the headache of relying on internal employees that may not have the experience or expertise to focus on payroll. Payroll specialists also have access to industry best practices and save time by leveraging the most effective ways to complete payroll tasks. Your payroll vendor can work together with you and have a deep understanding of your processes and employment conditions – and each of their team members can apply that knowledge to processing your payroll. 

In addition, once you decide on outsourcing your payroll services, it allows you to take advantage of your vendor’s payroll continuity plans. Their plans are well-developed and tested. Their staff is also trained to implement contingency plans in the case of a crisis. 

Outsourcing your payroll function and contingency plan

Implementing your payroll backup plan can be a complex task if your employees do not have the right awareness and training. Outsourcing your payroll can provide you with assistance and protection against the crisis, an absent payroll employee, or office site technology outages to ensure your employees are receiving their correct wages on time. 

It is important to consider: in times of disasters and global pandemics, can you protect your employees and continue to give them the stability they need or would you benefit more from outsourcing the function to a tax accountant who specialises in business payroll. 

Nothing you can do will stop natural disasters, pandemics, or IT outages. But acting now, you can prepare your business on how to deal with challenges that arise during this crisis. When thinking about payroll and disasters that can occur, 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
Working Holiday Visas and Tax Implications

Working Holiday Visas and Tax Implications

People from another country who have decided to go on a holiday in Australia should know about taxes. Lodging your tax return may be one of the last things on your mind. After all, you may have just arrived in Australia, and you look forward to exciting adventures, certainly not paperwork.

However, you should be aware of your responsibilities as a taxpayer, especially if you plan to work.

Working in Australia

Many holidaymakers are simply in the country to enjoy the sights. However, you probably want to earn some cash while here. Before you do, it is important that you get a Tax File Number (TFN). This number applies to all citizens, as well as non-citizens who wish to work in Australia.

It is a requirement to get a TFN for yourself. Failing to get a Tax File Number is not an entirely serious offense. However, you should be prepared to get slashed 45% off your income. With such a deduction, it makes sense to apply for a TFN.

If you require assistance in obtaining a TFN, please do not hesitate in reaching out to the tax agents at R T Accounting & Taxation Services. We will be more than happy to help you with obtaining a TFN.

What is your residency status?

Even if you stay for a long period in Australia, being a working holidaymaker regards you as a non-resident. Therefore, you will be taxed at a special rate, as mentioned above.

Those who are considered non-residents for tax purposes will only be taxed on the earnings they have received while in the country. Therefore, if you have another job overseas or in your own country, that income will not be taxed by the government.

But since you are not a resident, you cannot claim any expenses that you may have made. Residents can claim a tax refund for their travel and work-related purchases. Additionally, you are not entitled to the “living away from home” allowance, which is customarily deducted against taxable incomes for Australians.

These rules may look unprofitable for holidaymakers, but there is good news. You do not have to pay the Medicare levy because you are not an Australian resident for tax purposes. Residents must pay a two percent Medicare levy to cover certain medical costs. Your taxes will only be based on your income in the country. Also, the interest on your bank accounts will only be taxed at 10%.

In November 2019, the Full Federal Court decided that working holidaymakers who are Australian residents for tax purposes should be taxed at ordinary rates. If this situation applies to you and you are from the countries listed below, you could get a refund once the final decision has been given:

  • United Kingdom
  • Japan
  • Norway
  • Finland
  • Chile
  • Turkey
  • Germany

Currently, the rate remains, which is 15% for $37,000, which applies to both residents and non-residents. If you wish to get a refund from your taxes, you should provide records, including your residency status (as an Australian resident) and locations where you spent and stayed in the country. These documents can be anything from your credit card and bank statements to rental receipts. You should also provide employment and travel records, along with your visa applications.

Lodging Your Tax Return

Since the financial year ends on the last day of June, you should lodge your return after this date. Some employers may not take enough tax out of your income. If it is your case, you will have to pay the remaining amount that you still owe to the government. On the other hand, if your employer did pay more than what is required, you will get a refund.

Get in touch with the registered tax agents at R T Accounting & Taxation Services to maximize your refund and ensure that you are taxed at the rate you should be.

Read more
Investment Property Tax

Investment Property Tax Deductions

Considering interest rates are dropping to the lowest levels we have seen in years, along with a still booming house market. An investment property is a very tempting proposition for many taxpayers. Especially when it comes to tax benefits.

A landlord can have multiple ways to reduce their annual tax bill. And these deductions are often the difference between a negative cash flow and a positive one.

A key point to note is that investors can only claim deductions on their property. During periods in which it was tenanted or genuinely available for rent. And they can only claim a portion of an expense that was used for business purposes. And also must keep records to prove these expenses.

Here are the top tax deductions for investment properties.

Rental Advertising Costs

Landlords need to find tenants or re-let properties and do so through a range of advertising.

If you market your property using online, print media, brochures, and signs, you can claim these advertising expenses against your income. But only in the same year that you paid for them.

Loan Interest

Investors can claim the interest charged on a loan for an investment property and any bank fees for servicing that loan.

For example, if you incur $20,000 interest on your loan. And $200 in loan fees, you can claim these on your personal tax return. You can’t, however, claim your repayments on the principal sum. And you can’t claim interest on the entire size of the loan. As you refinanced a portion of the loan for private purposes. Regardless of whether equity in an investment property was used as security in that loan. 

Council Rates

Rates can be deducted in the year that they are paid, although you can only claim them during periods in which the house was rented.

For example, if your investment property was only rented for 180 days of the year, then you can only claim your rates for that period. This means you would claim 49.3% (180/365) of the total amount you paid in council rates for your investment property that year.

Land Tax

If you have a rented dwelling on your investment property, you can use land tax as a deduction. 

However, the levy differs significantly between states. As does the timing of when you can claim the cost. Consult your local tax agent at R T Accounting & Taxation Services to ensure you are claiming the correct amount in the right year.

Strata Fees

If your property is on a strata title, you can claim the cost of body corporate fees. 

But if the fee includes maintenance and garden expenses, you cannot claim these expenses separately.

Building Depreciation

Depending on when your investment property was built, you may be able to claim a deduction. But only on the depreciation of the building’s structure. And any renovations you make to the property.

If the property was built before 16 September 1987, you won’t be able to claim depreciation on the original construction costs. If it was built after that date, you can claim a depreciation deduction on these costs of 2.5% a year for 40 years. This would mean that, if the building were built for $100,000 in 1990, you could claim a depreciation deduction of $2,500 a year until 2030.

Similarly, you can’t claim depreciation deductions on renovations that took place before 27 February 1992. But you can claim depreciation deductions on structural improvements that took place after this date, at a rate of 2.5% for 40 years.

As always, though, you can only claim deductions for the period in which the property was rented or available for rent.

Appliance Depreciation

When offering a rental, landlords often install dishwashers, washing machines, air conditioners, stoves, and other assets. 

Just like the building itself, these appliances decline in value. And landlords can claim this depreciation over several years, usually in line with each asset’s “effective life”.

However, landlords can only claim depreciation on assets when they meet certain criteria.

You can only claim deductions on both brand-new and second-hand depreciating assets in residential rental properties. If you bought the property before 7:30 pm on 9 May 2017 and installed the asset before 1 July 2017. Otherwise, you can only claim depreciation on an asset’s purchase price. If the asset was brand-new, or if no one had previously claimed depreciation on the asset. Because the property was either newly constructed or recently significantly renovated. 

Repairs & Maintenance

You can claim repairs as an immediate deduction if they relate directly to wear and tear. Which is to say, if you replace a few broken roof tiles after a storm or repair an appliance, you can claim the costs of hiring a professional to make these repairs as an immediate deduction. But if you replace an appliance, you will need to claim this cost as a depreciation deduction, over the course of the asset’s lifespan.

Similarly, you replace an old fence or install new carpets purely in a bid to increase the value of the property. Then you will need to claim these costs as a capital works deduction, at 2.5% a year for 40 years.

Pest Control

Depending on who paid for the service, the tenant or the landlord can claim an immediate deduction for the cost of hiring a professional pest controller.

Garden and Maintenance

Property owners can claim the maintenance and replacement of plants and structures as an immediate deduction. However, you can not immediately deduct the cost of any new plants or changes that add extra value to the property. These are deemed as “improvements” and must be depreciated accordingly.


You can claim the cost of insuring a rental property. Your provider should be able to give you an annual breakdown of the cost.

Bookkeeping Costs

The numbers can become confusing with property investments. So most landlords have an accountant.

You can claim the costs of advice, preparation of tax returns. And also expense incurred for management of your rental accounts in the same year the costs were incurred.

Be aware, that you cannot claim a deduction against your rental property for the cost of preparing your personal tax return. However, you can submit this as a write off when doing your own income statement for the year.

Agent Fees

Fees or commissions paid to agents who collect rent, find tenants and maintain your rental property are tax-deductible.

Travel Costs

A mum and dad property investor can no longer claim the costs of travel to inspect a rental property or carry out repairs. 

The exceptions to this rule are excluded entities. And landlords who are carrying on a business of property investing.

For example, John owns several rental properties through his Self-Managed Super Fund (SMSF). He regularly travels to the homes to conduct repairs and do the garden. John cannot claim travel expenses for this. 

Legal Expenses

Costs for legal advice and documents that relate to rental activities are tax-deductible. 

For example, if you are evicting a tenant or going to court over unpaid rent, then you can claim the costs of doing so. As well as the costs of preparing all relevant legal documents. 

Under the current government, investors can offset any losses they make on an investment property against their assessable income. This is to say, if an investment property’s rental income is less than its expenses, the landlord can deduct this loss from their taxable income. So that they pay less property tax.

Capital Gains Discount

Finally, if you make a capital gain on the sale of your investment property, you need to pay property tax on this profit.

If you bought and sold your property within 12 months, your net capital gain is simply added to your taxable income. Which, in turn, increases the amount of income tax you pay.

However, if you held onto the property for more than a year before selling it, you’re eligible for a capital gains discount of 50%. This means you only need to incorporate half of the capital gain into your personal tax return. 

This information is of a general nature only and does not constitute professional advice on the property tax. You should always seek professional advice in relation to your circumstances before acting.

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 Tax in eastern suburb

Payroll Tax threshold relief for small businesses

As a result of the COVID-19 negative impact on small businesses, the Business NSW lobby group has been lobbying for payroll tax relief in the NSW annual state budget – stating that the relief in payroll tax will boost the economy and employment growth across the state.

Lobbying payroll tax has “paid” off. The New South Wales Treasurer, Dominic Perrottet has announced that the NSW payroll tax threshold will be increased to $1.2 million. Currently, the threshold sits at $1 million until 30 June 2021, and the current payroll tax rate is 5.45 percent. As Perrottet states “Our strong budget position has allowed us to weather the most severe economic storm in a generation, and we will continue to lead the way in job creation and supporting the business through the 2020–21 budget,”.

Earlier this month, NSW Premier Gladys Berekjiklian announced the government will allocate $250 million to support small and local businesses as a four-year program. The Jobs Plus program will provide payroll tax support to small businesses. This will include a four-year payroll tax-free period for businesses that create at least 30 new net jobs.  The Jobs Plus Program will commence on 15 December 2020 and conclude on 30 June 2022.

Business Council of Australia Chief Executive Jennifer Westacott is supporting the payroll tax relief announcement saying “Payroll tax is a tax on jobs, so payroll tax relief and removing investment-stifling red tape makes sense. We also welcome critical investment in programs to give workers in NSW access to the new skills they’ll need to get jobs in new industries”.     

What do I need to do for my payroll tax?

The payroll tax threshold differs in each Australian state and territory, and it is a tax paid to the state/territory. Your business payroll tax is determined by total monthly wages payable.

Your business may not need to pay payroll tax. Payroll tax is paid when your monthly wages are higher than the tax-free threshold. In NSW, employers who pay wages in NSW must be registered for payroll tax if their total Australian wages exceed the relevant monthly thresholds. You can find the payroll tax monthly thresholds >>here. These monthly thresholds will change from 1 July 2021 to account for the payroll tax threshold increase.

There are also exemptions from payroll tax that can benefit your business. Apprentices and trainees may be exempt from payroll tax – therefore their wages can be exempt from payroll tax. Additionally, motor vehicle allowances, accommodation allowances, and fringe benefits taxes are factors that determine if you are eligible for the full payroll tax threshold entitlement.

Furthermore, there is the issue of whether contractors are classified as “employees” or “external contractors”. Contractors and consultants’ salaries may be considered as wages for payroll tax purposes. Often employers make errors in classifying contractors versus employees resulting in the underpaid payroll tax. If caught out by the NSW Office of State Revenue, you need to have records that support your classification decisions. The NSW OSR has the right to penalize you if payroll tax is underpaid.

However, it is not as simple as filling in a form or incorrectly classifying employees in your payroll system to avoid paying payroll tax. All exemptions have requirements and/or thresholds that businesses must adhere to. If (or when) the OSR audit your business, they will look for documentation that supports all business expenses.

We recommend you have a chat with us at RT Accounting and Taxation Services. We care about all the payroll tax laws, exemptions, thresholds, and audits. It’s what we do best. We can ensure your business has all the right payroll tax documents in working order and all exemptions are correct. We want you to be ready if a payroll tax audit comes knocking on your door. Feel confident in our tax expertise and you focus on building your business.

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
payroll system in eastern suburbs

Wage theft caught you off guard? Here’s how you can avoid it.

If there was ever a time to be a law-abiding, business conscience employer – now is the time. Who would have thought a global pandemic would have prompted such a change in our working circumstances driving a closer examination into Australia’s workplace relations framework. While Covid-19 has transformed the home into a business office, employer representatives, experts, and unions have worked together to explore solutions for wage compliance and enforcement. The active union movement and class action interest have led the Fair Work Ombudsman (FWO) to focus on the issue and ensure businesses are aware of the consequences. Not to mention the Victorian and Queensland governments have passed legislation making wage theft a criminal offense with potential imprisonment as a penalty.

Wage theft sounds deliberate – and while it is the unlawful underpayment of employees – it describes all cases of employee underpayment, whether deliberate or unintentional. In all the years we have been working as tax accountants, we have seen very few underpayment cases. However, they do occur – even when you believe you have a plan in place. Often, underpayment cases in small businesses have occurred when employers have not understood and applied the correct aware requirements, resulting in wage non-compliance. This is a classic case of non-deliberate wage theft.

In Australia, there is a complex award framework, with over 120 modern awards – each award outlining minimum award wage rate and employment standards and conditions for employees based on their industry or occupation. The Fair Work Ombudsman keeps business owners on their toes by regularly reviewing and updating rewards. In fact, the framework is so complex – that we would recommend a professional with specialist knowledge to help you navigate it. This year, as a result of Covid-19, the Job Keeper wage subsidy (a vital lifeline for businesses trying to stay afloat) has compounded additional complexity. And with the introduction of Job Keeper 2.0, there’s no wondering why small businesses are left scratching their heads in confusion. Job Keeper 2.0 introduced changes to rates and eligibility, and employers were asked to apply a two-tier wage subsidy to its workforce. See what I mean when I say – best to hire a financial professional, who is equipped with the knowledge on how to navigate the system.

While there is no single mistake that addresses wage non-compliance, here’s how you can avoid wage theft and work with confidence >>

  1. Find help

It is important that the Fair Work Act is completely understood by employers and business owners. Unfortunately, as a business owner, you may not have the time or the knowledge to apprehend all the requirements set out in the Fair Work Act. Therefore, it is worthwhile to have an accountant and HR representative to assist you in navigating its complexity. Additionally, external help can also run an audit on your business to identify any issues you have within your business. 

  1. Custom your payroll system

When utilizing a payroll system, businesses must not forget to ensure it is up-to-date with all the correct awards and classifications. Unfortunately, out-of-the-box payroll software is not adequate for Australia’s complex award system; therefore it requires customization and maintenance. A professional can also assist with the management of your payroll system.

  1. Understand award requirements and employee classifications

Keep up-to-date with relevant awards for your industry, and ensure you are correctly classifying employees. Misinterpretation of awards can result in an investigation by the Australian Taxation Office, and incorrect employee classification can bring Fair Work Ombudsman investigations. Both awards and classification issues can lead to the underpayment of your employees.

  1. Made a mistake? Fix it ASAP!

While wage compliance is at the forefront of regulators, and unions – why not work with a professional to audit your business. If you find discrepancies within your employee classification or underpayments to employees, you will need to determine the length and amount of underpayment and rectify the mistake quickly. Additionally, finding the cause of the mistake will prevent underpayment from occurring again.

Navigating payroll, wage compliance, and the Fair Work Act in 2020 is more complicated than ever. Boost your confidence in your business’ compliance requirements, and come chat with us at RT Taxation accountant services for small businesses. We are equipped to help you keep on top of all the complexities surrounding wage compliance.

If you have any questions about the accuracy of your payroll systems in eastern suburbs and remuneration practices, now is the time to reach out to R T Accounting & Taxation Services for assistance.

Read more