** Please note that all of the information contained below is of a general nature only and not intended as a substitute for tax advice tailored to your individual circumstances. Please contact us link to contact us page today for more information on how these answers may relate to you.
INDIVIDUAL
What records do I need to keep for my work related expenses?
You do not need to keep receipts if your work-related expenses are $300 or less, however you must be able to show that the deduction relates to your income and if applicable how you calculated the amount you claimed.
If you claim more than $300 for work-related expenses, then you must keep written records as evidence of the whole amount, not just the amount over $300.
You must keep these records for 5 years from the later of due date for lodging your return or the date you actually lodged the return.
BUSINESS
Does my business need to register for GST?
You must register for GST if your business has a turnover of $75,000 or more
What structure is best for my business?
There are a number of factors which determine which structure is best for your business, including but not limited to, the Anticipated or Actual turnover, the Taxable Income or Profit, the Value of Assets used, your personal tax position, the Number of employees (if any). Please contact us if you would like to discuss your specific circumstances and the most appropriate structure for you. Whether you are starting a new business or your current business is growing selecting the most appropriate structure is vitally important.
I have recently taken on my first employee, what do I need to do now?
Provide a Tax File Declaration form (available from the ATO) to the new employee for them to complete and return to you. When returned, complete the Employer details (Section B) of the Tax File Declaration form. Forward the completed Tax File Declaration form to the ATO within 14 days of the employee’s start date.
If you haven’t already done so, register for PAYG withholding.
Prove the employee with a superannuation fund choice form to complete. Register as an employer with the employee’s chosen complying superannuation fund. Pay appropriate Superannuation Contributions (See below for more information on your Superannuation obligations)
How much tax do I need to withhold from my employees wage?
The amount of tax to withhold from your employees wage depends on a number of factors and changes with any change to the Individual Tax Rates. Please see the ATO website for an online calculator which will help you calculate the appropriate amount http://www.ato.gov.au/businesses/content.aspx?doc=/content/33268.htm
Is my contractor really an employee?
When a new worker starts, you need to determine if they are an employee or an independent contractor. There are a number of factors to consider and no one factor is necessarily conclusive and the outcome depends on all the facts involved.
A key factor is the degree of control that can be exercised over the worker. If you have the right to direct how, when, where and who is to perform the work, the worker is likely to be an employee. Workers being paid by the hour are also more likely to be employees than those being paid for a specific result.
Another factor is whether they are responsible for providing the materials or equipment required to complete the job and whether they are providing only personal services and cannot make a profit or loss on the work performed.
The ATO has an online decision tool which may help you determine how these factors apply to your circumstances http://www.ato.gov.au/businesses/content.aspx?doc=/content/00095062.htm
If your new worker is really an employee, then you may have obligations under PAYG Withholding, Superannuation Guarantee and Fringe Benefits Tax law.
What is the superannuation guarantee?
Under the superannuation guarantee law you must pay super contributions for your eligible employees, at a minimum rate of 9% of their ordinary time earnings. Most commonly ordinary time earnings are the employee’s Salary and Wages paid during their ordinary hours of work, however if you are unsure whether a payment you have made constitutes Ordinary Times Earnings, there is a comprehensive checklist available at:
http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/00249857.htm&page=26#P743_44195
Generally, you have to pay super for an employee if they're between 18 and 69 years old (inclusive) and you pay them $450 or more (before tax) in salary or wages in a month. It doesn't matter whether the employee is full time, part time or casual. Employees who are under 18 years old must meet these conditions and work at least 30 hours per week to be entitled to the super guarantee.
You can generally claim a tax deduction for super contributions paid on behalf of your employees. You have to make payments at least four times a year into a complying Superfund. The due date is 28 days after the end of each quarter.
What is Fringe Benefits Tax? Does my business have to pay Fringe Benefits Tax?
Fringe benefits tax (FBT) is a tax paid on certain benefits employers provide to their employees or their employees' associates (typically family members). There are a number of different types of Fringe Benefits, the most common of which are: Motor Vehicles, Expense Payments and Entertainment. Your liability to Fringe Benefits Tax will depend on the nature and the value of the benefit being provided. Please contact our office to discuss your individual circumstances and the potential liability to Fringe Benefits Tax.
What is Payroll Tax and do I need to pay it?
Payroll Tax is a State Tax payable on the wages you pay for your employees. It applies in all states and territories and is currently payable at 4.90% in Victoria. You only need to pay payroll tax if your Annual wages exceed $550,000. The definition of Wages for payroll tax is broader than the conventional definition and for example also includes Superannuation.
GENERAL
Do I need to pay Capital Gains Tax on the sale of my property?
Generally you will need to pay Capital Gains Tax on the sale of your property if it is not your main residence. For example you may be liable for Capital Gains Tax on the sale of your rental property. There are however a number of Capital Gains Tax concessions which may be available to you depending on the circumstances.