Payroll Compliance Updates- Australia
A. Update

The 2020/21 New South Wales (NSW) State Budget has announced a temporary reduction in the payroll tax rate to 4.85 per cent (from 5.45%) for the 2020/21 and 2021/22 financial years.

The threshold will also increase to $1,200,000 for the 2020/21 and subsequent financial years.

The Handling of the retrospective change is yet to be announced by the NSW Government.

B. Statutory Compliance Release Date: November 17, 2020
C. Effective Date: July 01, 2020
 
A. Update

The Government has announced the following measures as part of the 2020 Budget on October 06, 2020.

Stage 2 of its Personal Income Tax Plan will be brought forward and shall apply for the 2020–21 income year. The low and middle income tax offset will continue to be available for the 2020–21 income year but will not apply for the 2021–22 income year and later years.

Threshold changes

Once enacted, the measures will:

  • Increase the low income tax offset (LITO) from $445 to $700 and adjust the phase out rules
  • Increase the top threshold of the 19% personal income tax bracket from $37,000 to $45,000, and
  • Increase the top threshold of the 32.5% personal income tax bracket from $90,000 to $120,000.

The Government has passed the legislation updating the PAYG Tax rate Tables effective October 13, 2020. Please refer attachment for the updated PAYG Tax rate tables:


PAYG Tax Rates_13102020.xlsx

ATO has provided time till November 16, 2020 for the Employers to implement the tax rates changes.

Superannuation

The Budget has announced reforms to default superannuation accounts. The reforms were announced in a package entitled “Your Future, Your Super” and included the following key measures:

  • To avoid the creation of multiple superannuation accounts, superannuation accounts will be ‘stapled’ to members. This aims to ensure members keep their current existing superannuation account when they change jobs unless they elect an alternate fund.
  • From July 01, 2021, a new online YourSuper comparison tool will be available to more readily compare MySuper superannuation products.
  • The Government will legislate additional requirements set to ensure Trustees act in the best financial interests of members. This will include providing members, in advance of Annual Members’ Meetings, with key information regarding how Trustees manage and spend money.
  • MySuper products will be subject to an annual performance test. Where funds fail two consecutive annual underperformance tests, they will not be permitted to accept new members. These funds will need to disclose this underperformance and will not be able to re-open to new members unless their performance improves. By July 01, 2022, annual performance tests will be extended to other superannuation products.
  • There are no changes with respect to rates.
JobMaker Hiring Credit

A $4 billion JobMaker Hiring Credit will be payable for up to 12 months for each new job and is available from tomorrow to employers who hire eligible employees aged 16-35. The Hiring Credit will be paid quarterly in arrears at the rate of $200 per week for those aged between 16-29, and $100 per week for those aged between 30 to 35 years. Eligible employees are required to work a minimum of 20 hours per week. To be eligible, employers will need to demonstrate an increase in overall employee headcount and payroll for each additional new position created.

Please note that the ATO shall provide more details in the days to come (after legislation) for implementing the same.

B. Statutory Compliance Release Date: October 06, 2020
C. Effective Date: October 13, 2020
 
A. Update

The Government has announced the following measures as part of the 2020 Budget which was announced on October 06, 2020.

The Government has announced that stage 2 of its Personal Income Tax Plan will be brought forward and apply for the 2020–21 income year. The low and middle income tax offset will continue to be available for the 2020–21 income year but will not apply for the 2021–22 income year and later years.

Threshold changes

The enacted measure will:

  • increase the low income tax offset (LITO) from $445 to $700 and adjust the phase out rules
  • increase the top threshold of the 19% personal income tax bracket from $37,000 to $45,000, and
  • increase the top threshold of the 32.5% personal income tax bracket from $90,000 to $120,000.

The Government has passed the legislation updating the PAYG Tax rate Tables effective October 13, 2020. Please refer attachment for the updated PAYG Tax rate tables:


PAYG Tax Rates_13102020.xlsx

Please note that ATO has provided time till November 16, 2020 for the Employers to implement the changes for tax rates.

Superannuation

The Budget has announced reforms to default superannuation accounts. The reforms were announced in a package entitled “Your Future, Your Super” and included the following key measures:

  • To avoid the creation of multiple superannuation accounts, superannuation accounts will be ‘stapled’ to members. This aims to ensure members keep their current existing superannuation account when they change jobs, unless they elect an alternate fund
  • From 1 July 2021, a new online YourSuper comparison tool will be available to more readily compare MySuper superannuation products
  • The Government will legislate additional requirements set to ensure Trustees act in the best financial interests of members. This will include providing members, in advance of Annual Members’ Meetings, with key information regarding how Trustees manage and spend money
  • MySuper products will be subject to an annual performance test. Where funds fail two consecutive annual underperformance tests, they will not be permitted to accept new members. These funds will need to disclose this underperformance and will not be able to re-open to new members unless their performance improves. By 1 July 2022, annual performance tests will be extended to other superannuation products. There are no changes with respect to rates.
JobMaker Hiring Credit

A $4 billion JobMaker Hiring Credit will be payable for up to 12 months for each new job and is available from October 7, 2020 to employers who hire eligible employees aged 16-35.

  • For new workers aged between 16 and 30 - $200 per week
  • For new workers aged between 30 and 35 - $100 per week

Eligible employees are required to work a minimum of 20 hours per week. To be eligible, employers will need to demonstrate an increase in overall employee headcount and payroll for each additional new position created.

Please note that the ATO shall provide more details in the days to come (after it becomes a legislation) for implementation.

B. Statutory Compliance Release Date: October 06, 2020
C. Effective Date: October 13, 2020
 
A. Update

The Government is extending the JobKeeper Payment by a further period of six months up till March 28, 2021. The Parliament has passed the same on September 01, 2020.

The payment and reporting obligations provided in Job Keeper 2.0 are summarised below:

Employer Obligation
  • 1. From September 28, 2020, businesses and not-for-profits will be required to reassess their eligibility with reference to their actual GST turnover in the June and September quarters 2020. They will need to demonstrate that they have met the relevant decline in turnover test in both of those quarters to be eligible for the JobKeeper Payment from September 28, 2020 to January 03, 2021.
  • 2. From January 04, 2021, businesses and not-for-profits will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in each of the June, September and December quarters 2020 to remain eligible for the JobKeeper Payment from January 04, 2021 to March 28, 2021.
  • 3. To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:
    • 50 per cent for those with an aggregated turnover of more than $1 billion;
    • 30 per cent for those with an aggregated turnover of $1 billion or less; or
    • 15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).

If a business or not-for-profit does not meet the additional turnover tests for the extension period, this does not affect their eligibility prior to September 28, 2020.

Job-keeper Payment Rates
From September 28, 2020 to January 03, 2021, the JobKeeper Payment rates will be:
  • $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before March 01, 2020 or July 01, 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $750 per fortnight for other eligible employees and business participants.
  • The period with the higher number of hours is to be used for employees who were eligible at March 01, 2020
From January 04 2021 to March 28, 2021, the JobKeeper Payment rates will be:
  • $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before March 01, 2020 or July 01, 2020, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $650 per fortnight for other eligible employees and business participants.
  • The period with the higher number of hours is to be used for employees who were eligible at March 01, 2020

Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).

Employee Eligibility

Employees are eligible in the extension period if they:

  • are currently employed by an eligible employer (including if you were stood down or rehired)
  • were for the eligible employer (or another entity in their wholly-owned group) either:
    – a full-time, part-time or fixed-term employee at July 01, 2020; or
    – a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at July 01, 2020 and not a permanent employee of any other employer.
  • were aged 18 years or older at July 01, 2020 (if you were 16 or 17 you can also qualify if you are independent or not undertaking full time study).
  • were either: – an Australian resident (within the meaning of the Social Security Act 1991); or – an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at July 01, 2020.
  • were not in receipt of any of these payments during the JobKeeper fortnight: – government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; or – a payment in accordance with Australian worker compensation law for an individual's total incapacity for work.
Reporting through STP

In addition to the existing reporting requirements, the ATO also wants the Tiers to be reported through other allowances with zero value. The ATO further provided an option for corrections in tier reporting.

B. Statutory Compliance Release Date: July 21, 2020
C. Effective Date: September 28, 2020
 
 
A. Update

The government has introduced changes to the JobKeeper Payment, making it easier for businesses to qualify.

These rule changes include:

  • Employees’ eligibility for the JobKeeper Payment can now be assessed from July 01, 2020, rather than March 01, 2020.
  • Employees can now be nominated by new employers if their employment has changed since the JobKeeper Payment began. However, they can still only be nominated by one employer at any given time
  • Employers have until August 31, 2020 to meet the wage condition for new eligible employees under the July 01, 2020 eligibility test for:
    • Fortnight 10 – commencing on August 03, 2020 and
    • Fortnight 11 – commencing August 17, 2020.
    Eligible businesses and not-for-profits can still enroll at any time until the program closes. Businesses can claim reimbursement for their new eligible employees between 01 to 14 September, 2020 when they lodge their August monthly declaration.
B. Statutory Compliance Release Date: August 07, 2020
C. Effective Date: August 03, 2020
 
A. Update

The rule changes relating to JobKeeper payments for approved child care providers have been confirmed.

Eligibility for JobKeeper payments will stop from July 20, 2020 for both employees and business participant. Approved providers of child care services cannot claim JobKeeper payments for themselves or their employees whose ordinary duties relate principally to the operation of the child care service. Family Day Care educators (that are not approved providers of a child care service) may still meet eligibility requirements for JobKeeper.

Approved providers of child care services that also run other businesses (mixed business) will remain eligible for JobKeeper for employees of the other businesses whose ordinary duties do not relate principally to the operation of approved child care services.

B. Statutory Compliance Release Date: July 20, 2020
C. Effective Date: July 20, 2020
 
A. Update

The cents per kilometer (km) rate has increased from 68c to 72c and accordingly, the tax free limit for private car usage for business purposes will be up to 5000 km at 72c per km.

B. Statutory Compliance Release Date: June 11, 2020
C. Effective Date: July 01, 2020
 
A. Update

Please refer to the revised Tax codes 41 to 46 relating to STSL below:

B. Statutory Compliance Release Date: May 13, 2020
C. Effective Date: July 01, 2020
 
A. Update

The regional rates in Victoria will reduce from 2.425% to 2.02%.

B. Statutory Compliance Release Date: May 18, 2020
C. Effective Date: July 01, 2020
 
A. Update

The Maximum Quarterly employer SG contribution threshold of $55,270 for 2019-20 has been increased to $57,090.

B. Statutory Compliance Release Date: April 14, 2020
C. Effective Date: July 01, 2020
 
A. Update
  • The Life Benefit termination payment ETP cap will be increased to $215,000 from $205,000 and Death Benefit termination payment ETP cap to $215, 000 from $210,000.
  • The Redundancy Tax-free base amount will be increased to $10,989 from $10,638 and tax -free amount for completed years of service to $5,496 from $5,320.
B. Statutory Compliance Release Date: April 14, 2020
C. Effective Date: July 01, 2020
 
A. Update

The tax-free threshold for New South Wales will increase from $900,000 to $1 million and for Western Australia will increase from $950,000 to $1 million for the financial year commencing on July 01, 2020.

B. Statutory Compliance Release Date: April 06, 2020
C. Effective Date: July 01, 2020
 
A. Update

Payroll tax will apply at the reduced rate of 1.2125% for regional employers in bushfire affected local government areas. This halves the current payroll tax rate of 2.425% for these regional employers and will apply retrospectively from July 01, 2019.

The reduced rate applies until June 30, 2022. After this date, the reduced rate will apply for regional employers across Regional Victoria.

It is proposed that Employers will voluntarily report deductions related to child support from employee salary or wages through Single Touch Payroll if new draft legislation is passed.

Note:

With a registered address in the following local government areas: East Gippsland, Mansfield, Wellington, Wangaratta, Towong and Alpine

B. Statutory Compliance Release Date: January 29, 2020
C. Effective Date: July 01, 2020
 
A. Update

Businesses significantly impacted by COVID-19 will receive payment of $1,500 per fortnight for each eligible employee (as at March 01, 2020) as a wage subsidy from March 30, 2020 to September 27, 2020. Employers will be eligible for the subsidy if they suffered a decline in turnover of >50% (if turnover > $1 billion) or >30% (if turnover < $1 billion).

To be eligible, an employee must be at least 16 year’s old and should fall under one of the below category:

  • Australian citizen
  • the holder of a permanent visa
  • a Protected Special Category Visa Holder
  • a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more
  • a Special Category (Subclass 444) Visa Holder
Application process

Employer to register (Expression of interest) through the ATO website and notify eligible employees and obtain confirmation through employee declaration statement before enrolling through either of the three methods (ATO Business Portal, Online services for agents, Online services for Individuals) from Monday, April 20, 2020 till April 30, 2020 and provide details about eligible employee’s and other information.

Reporting

Data needs to be reported to the ATO on a payment basis and also complete a monthly declaration online. The reporting can happen based on either of the 3 methods – Online (less than 200 employees), STP, File upload. In STP, Top up amount under Other allowances (JOBKEEPER-TOPUP description and YTD amount) and One time Start fortnight period (JOBKEEPER-START-FNxx) and last fortnight period if before  September 27, 2020 (JOBKEEPER-FINISH-FNxx) needs to be reported for eligible employees.

JobKeeper related Leaves

This is available only for National system employer who qualify for the JobKeeper scheme and to eligible employees. The Employer will be able to temporarily, stand down an employee (including by reducing their hours or days of work), change an employee’s usual duty, change an employee’s location of work, and make an arrangement with employee. The payment shall be either the JobKeeper payment or their usual pay for any hours that the employee does work – whichever is more. The employee’s hourly base pay rate can’t be reduced.

Further, the qualifying employer may request an employee in writing to take paid annual leave at half their usual pay for twice the length of time (keeping minimum balance of 2 weeks). Employees still accrue their usual leave entitlements for the period the agreement applies (as if the agreement hadn't been made). Service is considered continuous for the purposes of redundancy and pay in lieu of notice (i.e. it counts as time worked).

Other leave impact

The Fair Work Commission made determinations to 99 awards. The determinations inserted a temporary new schedule into these awards. The employees are eligible for 2 weeks of unpaid pandemic leave and ability to take twice as much annual leave at half their normal pay, if employer agrees. The schedule in each award applies from an employee’s first full pay period on or after April 08, 2020 until June 30, 2020. This end date can be extended by application to the Commission.

Payroll-Tax

Every state in Australia has rules regarding the handling of the Job-keeper payment. There are four states (Victoria, New South Wales, Northern Territory and Australian Capital Territory) which have exempted the Top-up amount from Payroll tax wages. The Other four states (Queensland, Tasmania, South Australia and Western Australia) have exempted the entire Job-keeper payment to maximum of AUD $1,500 per fortnight. The salary and wages above this amount is subject to Payroll-tax.

B. Statutory Compliance Release Date: April 08, 2020
C. Effective Date: March 30, 2020
 
A. Update

The Queensland State Government to provide payroll tax relief to businesses impacted by the coronavirus outbreak. Under the measure, small and medium businesses throughout Queensland with a wage bill up to $6.5 million may be eligible to defer their payroll tax payment for six months. This may impact customers based on their wage bill and accordingly payroll tax will not be calculated.

B. Statutory Compliance Release Date: March 08, 2020
C. Effective Date: February 01, 2020
 
A. Update
Income-tax

As per ATO clarification, please do not to apply the working holiday maker (WHM) rates to any tax-free component of an ETP. Apply the same withholding treatment for allowances for WHM that applies to other employees.

AUSkey Transition
  • 1. For the state of Victoria, from February 24, 2020, clients must use the PTX Express log in details or myGovID for payroll-tax lodgment.
  • 2. For the state of Western Australia, from February 26, 2020, clients must use either ROL login details or myGovID for payroll-tax lodgment.
  • 3. For the state of Australian Capital Territory (ACT), from March 27, 2020 clients must use MyGovID to access the Self-Service Portal for Payroll-tax lodgment.
  • 4. From March  27,  2020, AUSkey and manage ABN connections will be retired. These credentials will be replaced by myGovID and Relationship Authorization Manager (RAM). Device AUSkey will also be replaced by new machine credentials which are a component of the Machine to Machine (M2M) authentication solution.
Leaves

Eligibility for 12 months unpaid leave after stillbirth: Parents dealing with a stillbirth or infant death will be guaranteed 12 months of unpaid parental leave, giving them the same entitlements as parents with healthy babies. This law is expected to be passed in Parliament soon.

B. Statutory Compliance Release Date: February 24, 2020
C. Effective Date: February 24, 2020 (Victoria payroll-tax),
February 26, 2020 (Western Australia payroll-tax),
March 27, 2020 for (ACT payroll-tax) and AUSkey decommissioning
 
A. Update

The Queensland Government has passed the legislation for a part-day public holiday on Christmas Eve.

The part-day public holiday starts at 6 PM and finishes at 12 midnight.

This means that the Christmas public holidays in Queensland are:

  • December 24 - Christmas Eve (from 6 PM to 12 midnight)
  • December 25 - Christmas Day
  • December 26 - Boxing Day
B. Statutory Compliance Release Date: December 17, 2019
C. Effective Date: December 20, 2019
 

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