In the last Federal Budget, the Australian Government announced that Single Touch Payroll (STP) would need to be explored in more depth to include additional information.
This expansion of Single Touch Payroll reporting will help reduce the reporting burden for employers. Who is required to report information about their employees to various government agencies such as the ATO and Centrelink? Through the support of the administration of the social security system in Centrelink? The start date for the expansion of Single Touch Payroll Reporting will be the 1st of January 2022. This means there are less than 7 months before these measures are introduced.
What Do You Need to Do?
Currently, there is nothing you will need to do provided. You are already reporting your Single Touch Payroll to the ATO every payday. The ATO will work alongside digital service providers such as MYOB and Single Touch who will update their STP-enabled software.
Firstly, it is important to understand that all STP-enabled software. They have different functions and updates for the expansion will be offered in various ways. It will be best for you to connect with the STP Reporting experts at R T Accounting & Taxation Services. To ensure that you continue reporting Single Touch Payroll correctly and on time to avoid any hassle or charges. We can help you set up STP Reporting software to be tailored to your product. And how you manage your payroll.
What Will Remain the Same?
While you may need to report additional information depending on your employees’ circumstances. Moreover, there are a few things that will not change regarding STP Reporting including:
- The way in which you are required to submit your STP Reports.
- STP reports are still due on or before payday unless decided otherwise prior to the ATO.
- The types of payments that are in-scope for STP reporting.
- Tax and Superannuation obligations for employers
- End of year finalisation requirements.
What does Will change?
In addition, the key changes to the STP report include:
- Will need to state whether your employee is full-time, part-time, or casual.
- Will need to report how you calculated your employee’s PAYG Withheld. Such as indicating whether your employee has HELP fees outstanding.
Income type and Country Code
- This is more specific to those employers who have employees who are Working Holidaymakers or the overseas host country of the employee who is an Australian resident working overseas.
Disaggregation of gross
- You will need to separate various components that make up an employee’s gross wages by the following payment types.
- Bonuses and commissions
- Directors’ fees
- Paid leave
- Salary sacrifice
- Salary Sacrifice contributions are no longer able to reduce ordinary time earnings or count towards your minimum superannuation guarantee obligations.
- As a result, an employer will need to report salary sacrificed amounts in the STP report.
- Lump-Sum E has been affected as you are now required to include the working calculations for Lump Sum E according to each financial year relevant to the payout. This will help the employer in that you will not be required to provide Lump Sum E letters to employees generally.
- A new category, Lump Sum W, will be added for employees returning to work payments which do not occur often.
Child Support Garnishees and Child Support Deductions
- There will be a requirement to report any Child Support Garnishees and Child support deductions in your STP report, removing the need to separately advise reporting to the Child support registrar.
With the changes coming to STP Reporting being simple to the trained eye, it might be best for you to get in touch with your local STP Reporting expert in the Eastern Suburbs of Sydney. R T Accounting & Taxation Services not only helps with STP Reporting but can also calculate and run pay runs based on your specific requirements. Get in touch to find out more!
Work-related Clothing Laundry & Dry-Cleaning Expenses
The ATO has been cross-checking clients’ work-related expenses for the 2020 tax year, with a specific emphasis on Work-related clothing laundry, and dry-cleaning expenses. Read on to ensure that you do not get caught out in the following year.
If you claimed the cost of a work uniform that is distinctive (such as one that has your employer’s logo permanently attached to it). It must be either:
- a non-compulsory uniform that your employer has registered with AusIndustry (check with your employer if you are not sure), or
- a compulsory uniform that can be a set of clothing or a single item that identifies you as an employee of an organisation. There must be a strictly enforced policy making it compulsory to wear that clothing at work. Items may include shoes, stockings, socks, and jumpers where they are an essential part of a distinctive compulsory uniform and the colour, style and type are specified in your employer’s policy.
Occupation Specific Clothing
You can also claim the cost of:
- occupation-specific clothing which allows people to easily recognise your occupation (such as the checked pants a chef wears when working) and which are not for everyday use.
- protective clothing and footwear to protect you from the risk of illness or injury, or to prevent damage to your ordinary clothes, caused by your work or work environment. Items may include fire-resistant clothing, sun protection clothing, safety-coloured vests, non-slip nurse’s shoes, steel-capped boots, gloves, overalls, aprons, and heavy-duty shirts and trousers (but not jeans).
- You can claim the cost of protective equipment, such as hard hats and safety glasses at Other work-related expenses.
- You can claim the cost of renting, repairing, and cleaning any of the above work-related clothing.
Claims for laundry expenses that are less than $150 can be claimed on a cents per wash method as per below:
- $1 per load if you wash only your work clothes.
- 50 cents per load if you combine work clothes with private use clothes.
To claim for laundry using this method, the clothing being washed must be a uniform, occupation specific clothing or protective clothing. It goes without saying but you cannot claim the cost of purchasing or cleaning plain clothes, such as plain, black trousers, white shirts, suits, and stockings even if your employer requires you to wear them as these items are seen as wearable for private use anyway.
If you claimed protective clothing and footwear to protect you from the risk of illness or injury, applicable to those in COVID hotspots, or to prevent damage to your ordinary clothes you will need to keep a record of a description of the protective clothing and equipment you are required to wear as well as copies of receipts with proof of purchase.
For COVID-19 specific protective items, you will be allowed to claim a deduction for expenditure on protective items such as gloves, face masks, sanitiser, and antibacterial spray.
As always, if you are in doubt as to what expenses constitute work-related clothing laundry, and dry-cleaning expenses it is best to contact us at R T Accounting & Taxation Services to help you make correct decisions on what to buy to reduce your taxable income and increase your refund!