SUPER CHANGES FOR EMPLOYERS AND SUPPORT FOR SMALL BUSINESS
While your tax and super obligations may be the last thing on your mind as you continue to navigate the impacts of COVID -19, we want to highlight some recent changes to the Super guarantee as well as upcoming changes to Single Touch payroll.
These changes may impact the way your business reports and pays your tax and super, so it’s important to understand them. We’ve also included information about additional help and support resources if you need it.
If you’re unsure what these changes mean for your business, or have other tax and super questions, we encourage you to seek advice from your trusted tax professional, check our website for more information, or contact us. We’re here to help.
Super guarantee (SG ) changes
On 1 July 2021, the SG rate increased from 9.5% to 10%. This means you’ll need to calculate SG contributions at 10% on all salary and wage payments made to employees on or after 1 July 2021, even if some or all the payment relates to work performed before this date. The next SG quarterly due date is 28 October 2021. For more information, visit ato.gov.au/PayingSuper
Requesting stapled super fund details from 1 November 2021
From 1 November 2021, you may have an extra step to take to comply with choice of fund rules for employees who start on or after that date. If a new employee doesn’t choose a super fund, you may need to request details of a ‘stapled super fund’ from us. A stapled super fund is an existing account which is linked, or ‘stapled’, to an individual so that it follows them as they change jobs. This aims to reduce account fees by stopping new super accounts being opened every time an employee starts a new job. More info is available at ato.gov.au/StapledSuperFund
Single Touch Payroll (STP ) Phase 2
Each time you pay your employees through Single Touch Payroll (STP) enabled software, you send their tax and super information to us, including:
• salaries and wages
• pay as you go (PAYG) withholding
• super liability information.
From 1 January 2022, the data collected through STP is changing. This is known as the STP expansion or STP Phase 2. The additional information you need to report should already be captured in your payroll software. STP Phase 2 will reduce the reporting burden for employers who need to report information about their employees to multiple government agencies. It also supports the administration of the social security system. For example:
• you will no longer need to send Tax File Number declarations to us – you’ll only need to keep them with your employee records
• you may no longer need to provide separation certificates to your employees when they leave
• if your solution offers the functionality and you choose to report Child Support deduction and garnishee amounts through your STP report, this will reduce the need for additional reporting to the Child Support Registrar.
The key changes and what they might mean for you include:
• Amounts paid to employees – instead of reporting a single ‘gross’ amount, you’ll separately report components such as overtime, paid leave, bonuses and commissions.
• Employment conditions – you’ll provide some additional information, such as whether your employee is full time, part time or casual, and the reason they stop working with you if they leave.
• Income types – you’ll include information such as whether payments are regular salary and wages or made to closely held payees (such as family members of a family business) or working holiday makers. This will mean we can identify relevant concessions and specific tax consequences.
• Country codes – you’ll need to tell us where employees such as working holiday makers are from, and where any of your employees who are Australian residents working overseas are working.
• Lump sums – by reporting Lump sum E payments through STP, you generally won’t have to provide lump sum E letters.
• Child support garnishees and Child support deductions – you may be able to voluntarily report child support information in your STP report, which will reduce the need to give separate remittance advices to the Child support registrar.
Many things aren’t changing including:
• how you lodge your STP report
• when STP reports are due
• the types of payments that need to be reported
• your tax and super obligations
What if my software provider is not ready?
Different payroll solutions will be ready at different times. If your software provider needs more time to update their product, they can apply for a deferral on your behalf so you’ll be covered. Your software provider will tell you what you need to do and when. To find out more, visit ato.gov.au/STP2.
Help and support for small business – Get your whole-of-government information in the one place.
A good starting point is business.gov.au. which is a whole-of-government website for the Australian business community, with information on a wide range of topics. You’ll be able to find links to government financial assistance and support for your business, grants and support in your state or territory, and more.
You can also subscribe to our Small Business Newsroom at ato.gov.au/sbnews to stay up to date on tax and super changes and other information to help you run your small business. Most importantly, remember to ask for help if you need it. We have a wide range of resources for small business at ato.gov.au/SBsupport including our tax time toolkit. We are also here to support you in difficult times. Depending on your circumstances, we may be able to offer additional help. Find out more at ato.gov.au/support.
Live chat – use this service to ask about GST, ABN, myGovID, BAS, account enquiries and to update details. Live chat is available from 3.00pm–8.00pm (AEDT) Monday to Friday and 10.00am–2.00pm (AEDT) on Saturday (except public holidays).
You can also speak with your trusted advisor or registered tax professional for advice.
Tony Goding is an acting Assistant Commissioner in the Small Business area of the ATO. His role involves engaging and supporting small businesses so that it’s easier for them to meet their tax, super and registration obligations. He is also focused on advancing the ATO’s digital services and helping small businesses manage their cash flow.