Australia Payroll Compliance Map

Email: mel4ww@evershinecpa.com

Australia CA Lily Yan, speak both English and Chinese
2/172-176 Rowe St Eastwood, NSW 2122, Australia

WWT – Australia Payroll Income Tax Deduction

WWT-AU-01 WWT Tax Entity

Question from client:
Is the Australia salary income tax levied in federal or local? Or both federal and local?
Are the federal and local personal income tax that levied separately? Or levied together?
What is the standard withholding tax rate?

Answer from Evershine RD:
Taxed at both federal and state level.
Levied separately.

Federal: withholding tax rate is based on tables classified into 6 Scales with different conditions to apply for. Refer to the link for the tax tables: https://www.ato.gov.au/rates/tax-tables/

States: withholding tax rate vary between States such as Australian Capital Territory, New South Wales, Northern Territory, Queensland, South Australia, Tasmania, Victoria, Western Australia.

 WWT-AU-02 Registration

Question from client:
The Australian salary income tax collection is under the jurisdiction of which government unit?
The registration of the Australian salary income tax collection status, that is, the application procedure for the employer withholding certificate number, paper certificate number application, or online account application? Website? Employer withholding certificate?
What is the advance certificate number of the number? Do you need to use the industrial and commercial certificate e-card to apply? 

Answer from Evershine RD:

Federal payroll tax is governed by Australian Taxation Office (ATO).

1. Register an Australian Business Number (ABN)
2. Register for PAYG withholding business account through the “Online services for business”. Sign in using myGovID. Do not require industrial and commercial certificate e-card to apply.
3. You can also complete the Add a new business account (NAT 2954) form. Form can be retrieved from the below link:
   https://www.abr.gov.au/business-super-funds-charities/applying-abn

States payroll tax varies depends on which states the company is situated.

For Example, Victoria is State Revenue Office (STO).
Refer to the link for the government website: https://www.sro.vic.gov.au/payroll-tax
You must register for payroll tax in Victoria if you have total Australian wages or total group Australian wages exceeded the monthly threshold of A$58,333 (for FYE 2021/2022) in any month in the current financial year.

1. Information required before start register:

• Legal Name
• ABN/ CAN
• WorkCover Employer Number (WEN)
• Date began to employ
• Current year wage estimates
• Past 4 years wage details include superannuation and FBT
• Business activities
• Contact information

2. For Victoria, online registration with an email address at https://www.e-business.sro.vic.gov.au/eBusiness/ptx/faces/register/welcome.xhtml

WWT-AU-03 WWT Order (OD)

Question from client:
What is the order of Australian salary income tax withholding declaration (information flow determines tax base) and payment (fund flow)?
Pay first and then declare?
Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Same Period (SP) – Declaration and payment are due at the same time.

WWT-AU-04 Mechanism of Filing (MOF)

Question from client:
Australian salary income tax withholding declaration (information flow determines the tax base)
What is the method of account return?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Web site URL?

Answer from Evershine RD:

Federal:

PAYG withholding report using business activity statement (BAS)

1. Lodge using PAYG tax withheld section of the business activity statement (BAS) and pay all withheld amounts.
2. Able to lodge online using “Online services for business”, sign in using myGovID. https://mygovid.gov.au/AuthSpa.UI/index.html#login
3. Able to lodge by mail. Mail the original and completed BAS, using the pre-addressed envelope provided in your BAS package or if pre-addressed envelope misplaced, send the BAS to the following address.
   Australian Taxation Office
   Locked Bag 1936
   ALBURY NSW 1936

4. Quarterly reporting if GST turnover less than A$20 million, Monthly reporting if GST turnover is A$20million and above, Annual reporting for voluntary registration and GST turnover below A$75,000. Filing date for quarter reporting is 28^th of the following month of filing period.
   The filing date for quarter reporting is the 21^st of the following month of filing period.
5. You may qualify for an extra two weeks to lodge and pay for quarterly activity statements if you receive and lodge them online.

PAYG withholding payment summary annual report

1. Need to be lodged if there is withholding amount.
2. You do not need to lodge a payment summary annual report for amounts you report and finalize through Single Touch Payroll (STP).
3. Report by 14 August annually.
4. Able to lodge using paper forms. https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/3447-02.2014_PAYG%20payment%20summary%20statement.pdf
5. Able to lodge online using “Online services for business”, sign in using myGovID. https://mygovid.gov.au/AuthSpa.UI/index.html#login

States – Victoria:

Monthly return

1. Lodge the monthly return online by:

1.1. Login to PTX Express https://www.sro.vic.gov.au/ptxexpress and selecting from the menu to lodge a monthly return.
1.2. Select the correct liability period, such as 1 July -30 June.
1.3. Entering your wages.
1.4. Lodging your return.

2. Returns must be lodged within 7 days after the close of the month to which the return relates.

Annual reconciliation

1. Login to PTX Express.
2. Select “Annual Reconciliation” from the menu to lodge an e-AR.
3. The relevant financial year, select ‘Begin’ from the Actions field.
4. Review your details and enter wages.
5. Review payroll tax payments made during the financial year for the reconciliation period.
6. Review the calculation for your amount of tax payable or amount overpaid.
7. Lodge your e-AR by selecting the ‘Lodge’ button on the Lodgment page.
8. Annual return and reconciliation is required by 21th July each year.

WWT-AU-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for the Australian salary income tax withholding payment (funding flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:
Payment deadline is same as the filing deadline above.

Federal:

How to pay your BAS?
BPAY, credit card or debit card.
https://www.governmenteasypay.gov.au/payATO

You can also pay using a payment reference number (PRN)/ EFT code if you lodge online.
For online lodging, login to Online services for business, select Accounts and payments, select Accounts summary, find the relevant PRN, and finalize your payment.

States – Victoria:

Pay online through PTX Express – upon your approval, the system can debit your monthly return from your account and end of year annual reconciliation payments.
You can also pay by EFT, BPAY and credit card.

BNF – Deduction of Employee Social Welfare

BNF-AU-01 BNF Entity

Question from client:
Australia’s social insurance, medical insurance, pensions and other employee social welfare levy, is it Federal? Is it local? Or is there a Federal plus local?
If there is a Federal and local, are they levied separately? or levied together? What is the withholding tax rate?

Answer from Evershine RD:

Federal:
Retirement program: Superannuation contribution (SG) levied at 10% (FY2021/2022) on employer only.
There are no social security taxes in Australia.

BNF-AU-02 Registration

Question from client:
Social Security Certificate Number? What is the name of the government agency in charge of social insurance?
Medical insurance certificate number? What is the name of the government agency in charge of medical insurance?
Pension certificate number? The name of the government agency in charge of pensions?
How to apply for the social welfare certificate number for employees in the country? Paper certificate number application? Or online account application? Website? Need to use the industrial and commercial certificate electronic card to apply?
Are the above three certificate numbers unified or separate?

Answer from Evershine RD:
SG contribution is governed by Australian Taxation Office (ATO).
SG contributions should be paid to either Employee’s chosen fund or Employee’s stapled fund.
Employer must provide eligible employees a Superannuation standard choice form within 28 days of their start date.
When an employee gives their TFN, you must give it to their super fund.
Super funds need your employee’s TFN so that:

• The super fund can accept personal contributions from the employee
• The employee will not pay extra tax on super
• The employee can find all their super accounts.

BNF-AU-03 BNF Order (OD)

Question from client:
What is the order of the withholding declaration of social welfare for Australian employees (information flow determines the tax base) and payment (fund flow)?Pay first and then declare? Report first and then pay? At the same time as the declaration and payment?

Answer from Evershine RD:
SG payments
Report and pay at the same time.

BNF-AU-04 Mechanism of Filing (MOF)

Question from client:
What is the method of reporting for withholding of social benefits for Australian employees (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: Web site URL?

Answer from Evershine RD:
3 ways to transfer data to your employees’ superfund:

1. Through a SuperStream compliant system. Check your software provider to ensure your payroll system is SuperStream-compliant.
2. Through a commercial clearing house or the Small Business Superannuation Clearing House.
3. Through your super fund if it offers this service.

BNF-AU-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for Australian employee social welfare withholding contributions (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:
Quarterly super payment due dates is 28^th of the following months of the quarter.
You can also make payments more frequently than quarterly. For example, fortnightly or monthly.
If you do, ensure you pay your total SG contribution for the quarter by the due date.
Check the contractual obligations you have with your super fund to ensure super contributions are paid on time.
SG payments can be pay directly with EFT or BPAY.

Please be aware of below Warning:
The above contents are digested by Evershine R&D  and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Melbourne Evershine BPO Service Limited Corp.
E-mail: mel4ww@evershinecpa.com
Australia CA Lily Yan, speak both English and Chinese
2/172-176 Rowe St Eastwood, NSW 2122, Australia

For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System, please send an email to HQ4mel@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable to your case.
Linkedin address: Dale Chen

Additional Information

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Email: kerrychen@evershinecpa.com
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