The new financial year is quickly approaching and for many businesses that will mean changes will have to be made to their payroll to remain compliant with legislation.
The main focus for July 1st is to have STP (Single Touch Payroll) in place. All businesses regardless of size now need to report each payroll event to the ATO electronically via STP. In the upcoming financial year, all PAYG and PAYGW figures should also now flow through automatically to each online BAS / Activity statement.
With the introduction of STP, there are no longer payment summaries as this information (now called an Income Statement) now appears in the employee’s MyGov account. When the employer’s annual STP reconciliation is complete, the income statement will be marked as ‘Tax Ready’ – it is recommended that no tax return be done unless earnings are ‘Tax Ready’. The ATO has advised that all employers must finalise the 2018/19 STP reconciliation by 31st July.
Following is a summary of key information any payroll professional requires to ensure compliance in the 2019/20 financial year:
- For redundancies, the Lump Sum D threshold will increase to $10,638 + $5,320 for each completed year of service
- The ETP indexed cap will increase to $210,000 from 1 July 2019
- The Maximum Superannuation Contributions base will increase to $221,080 per annum, which equates to $55,270 per quarter. For any earnings above this quarterly limit, employers do not have to pay SG Contributions
- The Concessional Contributions Cap remains at $25,000 for everyone.
- Superannuation Guarantee remains at 9.5%
- Medicare Levy remains at 2%
- The income testing levels for the Private Health Insurance Rebate for this year have remained the same at $90,000 for singles and $180,000 for families
- The cents per kilometre rate remains the same at 68 cents per kilometre. Up to 5,000 business kilometres can be claimed without paying tax. If paying in addition to 5,000 kilometres or more than 68 cents, tax should be withheld from the applicable portion
- From the first full pay period on or after 1st July 2019 there is a 3.0% increase to the minimum wage to $19.49 per hour or $740.80 per week. The 3.0% also applies to all modern awards.
- There have been changes to the PAYG Tax Tables with SFSS tables no longer being separated. HELP/SSL/TSL tax tables are to be renamed ‘Study and training support loans tax tables’. Repayment rates and income thresholds have reduced and will commence at $45,881.
If you are unsure if your payroll is compliant, call E-Payoffice and enquire about our payroll service. For most businesses, our payroll service is a cost-effective payroll solution compared to in-house processing.