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Single Touch Payroll reporting for all – it’s just around the corner

Are you one of the estimated 700,000 employers who will need to be Single Touch Payroll (STP)-compliant by July 2019?  Legislation to extend STP reporting to all employers has just passed into law. STP reporting is set to be mandatory for all employers soon. Initially, as a transition, employers with 20 or more employees were required to use the new system to streamline their business reporting obligations, and be reporting by July 1, 2018.

Reporting under the system means there is no requirement to issue payment summaries, or tax file number declarations, or annual reports to the ATO. The STP has revolutionised the way employers report payroll to the ATO. Each time an employer pays an employee using the STP software, they are also sending the ATO data such as salary, wages, allowances and PAYG withholdings.

In a matter in months, smaller employers with 19 or less employees will need to be STP-compliant too. There are almost 15,000 of these employers already voluntarily payroll reporting via STP. The ATO is recommending smaller employees join them and voluntarily opt-in early.

For more information:

Victorian long service leave entitlement changes – what you need to know

The Long Service Leave Act 2018 (Vic), passed by the Victorian Parliament comes into effect on November 1, 2018. The changes to the Long Service Leave Act mean that any period of paid parental leave and up to 12 months of unpaid parental leave will count as service, and no amount of parental leave will break continuity of service. The laws will also allow workers to apply for leave after 7 years service, as soon as long service leave entitlements begin accruing, rather than after 10 years.

In announcing the The Long Service Leave Act 2018 (Vic), Minister for Industrial Relations Natalie Hutchins stated: “the new Long Service Leave laws are a huge win for women, parents and carers across Victoria. No one should be penalised for spending more time at home when their kids are born, or for changing their working hours to look after a loved one.”

Key long service leave changes include -

  • Access to long service leave after 7 years, not 10.
  • Allowing employees to take long service leave in smaller increments.
  • Most absences from work do not break continuous employment.
  • Unpaid leave, including parental leave, counts towards long service leave.
  • Increased penalties for employers who do not keep records or do not produce them when requested.

  • Consider outsourcing your payroll to a trusted partner.

    Processing payroll requires both a complex understanding of the surrounding regulations and in-depth knowledge on how to apply it for your particular business.

    Our small and friendly team is able to get to know you as a person, not just as a name in our database. We've been assisting our clients in maximising their potential and reaching their business and taxation objectives since 1982. A local business client of 10 years, Space Flooring and Interiors in Warragul recently expressed their appreciation for our services and long term successful relationship.

    "We've dealt with Scott and the team at MLC Taxation & Business Services for about 10 years now. They're absolutely wonderful in accounting and helping you run both your business and your personal finances. They're very knowledgeable particularly with tax situations, that is their area of expertise and that is so important to all of us, to make sure that we are paying the minimal amount of tax and we're not missing any advantages that we are able to gain. Scott is an expert in this area and many a time he has given us advice that has been pivotal, as they were things that we would have missed without his expert knowledge. His team is excellent. We deal with Kirsten and Amy a lot in the business. They are both very personable and professional. Amy takes expert care of our bookkeeping. A lot of people's perception of accountants is that they know their stuff but they don't have much personality but Scott and his team are unique in that department. He has a wonderful personality. They are so great to deal with. They're always very warm and friendly. They really care about you. They look carefully at your situation. They research thoroughly and come up with suggestions for you after careful consideration so they are always on top of things. You can have complete trust and faith that your money is being looked after and controlled to the best possible advantage. I highly recommend Scott and all of his team. We couldn't be happier with the service, expertise and friendship that they have provided over the last 10 years."
    - Director and Interior Designer, Space Flooring & Interiors, Warragul.

    The long service leave changes will require businesses to adapt the way they manage and administer leave. Employers are encouraged to review their long service leave policies and administrative systems to ensure that they are consistent with the new changes. If you need assistance with your payroll or are looking to assure your compliance, contact MLC Taxation & Business Services today to discuss the benefits to outsourcing your payroll.

    Client rights and obligations under tax law

    Client rights & obligations under tax law - link to document    

    Recent changes to legislation make downsizing more appealing.

    According to the Australian Housing and Urban Research Institute the most common factor for contributing to downsizing in older Australians is a desire for a change in lifestyle. And while lifestyle improvement is the key driver, recent changes to legislation of downsizing contributions into superannuation make it more financially appealing.
    From July 1, 2018 a measure as part of a package of reforms to reduce pressure on housing affordability called the Downsizer Super Contribution Scheme (DSC), will enable individuals 65 years and over who meet the eligibility requirements to make a downsizer contribution of up to $300,000. Couples will be able to contribute up to $300,000 each from the proceeds of the sale of their home, giving a total contribution per couple of up to $600,000.

    To qualify for the DSC Scheme applicants must meet the following criteria:

    -65 years or older at the time you make the contribution. (no maximum age limit)

    -The contract of sale is exchanged on or after 1 July 2018.

    -Prior to the sale your home was owned by you or your spouse for a minimum of 10 years.

    -Your home qualifies partially as your main residence.

    -Your home can’t be a caravan, house boat or other mobile home.

    -You must make the contribution within 90 days of settlement.

    Contribution amounts.

    -The contribution amount can’t be greater than the total proceeds of the sale of the home. For example, if a couple sell their home for $500,000, they can choose to contribute half ($250,000) each, or choose to divide it - for example, $300,000 for one and $200,000 for the other.

    -If a couple sell their home for $900,000. They both can make a superannuation contribution of $300,000.

    -The contribution does count toward Age Pension eligibility tests.

    -The downsizer superannuation contribution is taken into account when determining eligibility for the Age Pension. The contributions are not tax deductible.

    No requirement to buy a new home.

    If you sell your home and are eligible for the super contribution, there is no requirement for you to purchase another home.

    Contributions not subject to the $1.6 million super balance restriction.

    The contribution will not count towards your contributions caps. If an individual has a total super balance that is great than 1.6 million the contribution can still be made. It will count towards your transfer balance cap, the limit on the total amount of super that can be transferred into the retirement phase.

    90 days for contributing sale proceeds into super.

    As above, you must make the contribution within 90 days of settlement. Or an application for an extension of time may be considered.

    There are many considerations if you are thinking about downsizing such as transfer and property costs and the release of excess capital. And even if the incentive for downsizing makes financial sense, it is a major decision to move from a suburb or town you have been living in more many years. For tailored information on the DCS Scheme as it applies to your circumstances, call MLC Taxation & Business Services today.

    Is Your Business Single Touch Payroll-ready?

    New Single Touch Payroll (STP) legislation is a Federal Government Initiative. It’s a significant legislative change, not seen since PAYG 17 years ago. The legislation is born from the Government’s Digital by Default Declaration and it’s a pivotal leap to better online service delivery with a number of benefits for employers and employers alike. It is designed to improve the accuracy of payroll information sent to the ATO whilst simplifying the process for employers. To be compliant with the legislation, employers with 20 or more employees must switch to the STP system by July 1. If you become an employer of 20 on or after April 1 this also applies. For employers of less than 20, the switch is voluntary, but you may be required to switch by July 1 2019.

    Employers will benefit from STP

    Switching to STP reporting presents a number of benefits to employers. Your updated payroll solution will effectively send necessary payment, PAYG withholdings and super information directly to the ATO all at the same time, thereby streamlining the reporting process.
    • The streamlined process means employers will no longer be lodging employee TFN declarations.
    • Employee data that has been validated will be available to employees directly via MyGov.
    • STP will provide employees with payment summaries.
    • The STP report will allow employers to make adjustments for a prior period as well as for future periods providing flexibility to make corrections.

    Employees will better monitor and manage their tax and super

    The roll-out of STP provides more control and ability to manage tax and super. Via MyGov employees can –
    • consolidate super balances
    • apply for withholding variations, make corrections if they have claimed more than one tax-free threshold
    • view YTD payroll details
    • make their TFN declaration
    • manage their tax balances.
    MLC Taxation and Business Services is a payroll specialist and solutions provider. We’ll help you understand what the switch means for you and your business. We’ll assist you to get your business ready for the STP switch starting with checking whether your payroll system is STP compliant.

    New! Investment Property Depreciation Calculator

    Estimate the likely depreciation deductions for your investment property...


    ABN renewal fees could be introduced, affecting business owners.

    The Turnbull Government is considering changes to the ABN system alongside a suite of other reforms that are part of the Digital Transformation Agenda.

    The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, has released a consultation paper seeking views on designing a modern ABN system.

    There is currently no cost to apply for or continue to use your ABN. Approximately 7.7 million Australians hold a current ABN.

    The consultation paper invites views on whether ABN holders should be required to renew their ABNs and with it the associated cost, as well as adjusting ABN entitlement rules.

    While the consultation paper does not specify how much it might cost to renew an ABN, it suggests “fees would cover the cost of the registration and renewal process, consistent with fee arrangements for similar registration and renewal processes.”

    Minister O'Dwyer stated “the ABN system is the backbone of business registration with around 7.7 million ABN registrations, and around 860,000 new ABNs issued in 2017-18. The ABN is increasingly acting as a business enabler, underpinning laws targeted at business, and signalling a business’s credentials. It is therefore timely to consider whether the ABN system remains fit to support the expanded range of purposes an ABN serves today.”

    The request for feedback and comments closes 31 August 2018.

    You can find the consultation paper on the Treasury website.

    Are you making voluntary super contributions and looking to buy your first home?

    Under the First Home Super Saver (FHSS) scheme, if you’re making voluntary concessional or non-concessional contributions to your super fund, from July 1 you can apply to release these contributions, and any associated earnings, to help with the purchase of your first home.

    How much can you save under the FHSS scheme?

    You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $30,000 contributions across all years. The FHSS scheme rules apply to each person as an individual. This means you and your partner can each save $30,000 under the scheme – $60,000 in total.

    You must meet the eligibility requirements to apply for the release of these amounts. This scheme is suitable for first home buyers if:
    • You either live or intend to live in the premises you are buying as soon as practicable.
    • You intend to live in the property for at least six months of the first 12 months you own it, after it is practical to move in.
    • You have never owned property in Australia including an investment property, vacant land, a commercial property, a lease of land in Australia, or a company title interest in land in Australia.
    • You have not previously requested to issue a FHSS release authority in relation to the scheme.

    How do I release my savings?

    You can check your balance with your super fund/s at any time to see how much you have saved. This will help you keep track of the maximum FHSS amounts you can have released. When you are ready to receive your FHSS amounts, you need to apply to the Commissioner of Taxation for a FHSS determination and a release.

    At what point do I need to release the funds?

    When you are ready to purchase your home you must request that the FHSS funds be released prior to entering into a contract to purchase or construct your first home. Once the funds are released you have 12 months to enter into a contract. It can take some time to release the money from the ATO to your super fund.

    When can I apply?

    You will be able to apply from 1 July 2018. You can apply online using your myGov account linked to the ATO.

    Before you start saving you should..

    Check that your nominated super fund/s will release the money and enquire with your super fund about fees, charges and insurance implications that may apply. There are certain superannuation funds that do not allow these contributions to be withdrawn. Also you need to be aware that FHSS amounts received will affect your tax for the year in which you make the request to release.

    If you're hoping to buy your first home, contact MLC Taxation & Business Services to learn more about how the changes to superannuation may enable you to save money for your first home inside your superannuation fund.

    The Labour Hire Licensing Act – key points labour hosts and providers need to know

    The Victorian Government passed the Labour Hire Licensing Act with the aim of restoring integrity in the labour hire industry. The Labour Hire Licensing Bill 2017 seeks to protect labour hire workers from being underpaid and exploited by labour hire businesses and hosts. Minister for Industrial Relations Natalie Hutchins stated: “following the damming findings of the independent inquiry, we’ve taken action to clean up the industry and make things fair for labour hire workers across Victoria. Under these new laws, businesses will need to be licensed and do the right thing, or face hefty penalties.”

    Victoria observed earlier legislation implemented in Queensland and passed in South Australia. However last month the South Australian Liberal Government sought to repeal labour hire licensing laws introduced by the previous Labor Government, amid concerns over the effectiveness of the scheme.

    The Labour Hire Licensing Act ensures that all providers are legitimate businesses and can meet strict licensing standards. These standards measure a labour hire provider’s past and future capacity to comply with workplace, superannuation, tax, safety and migration laws, as well as applicable accommodation standards. There are key points Victorian labour hire providers and host organisations need to be aware of.

    Who is impacted by the Victorian Labour Hire Licensing Bill?

    If you have employees who are provided and paid for by a third party or you employ staff to work in other organisations you are potentially impacted by the Bill. It impacts all industries in Victoria not just agriculture. All private and public sector organisations could potentially be affected by this legislation.

    What is the Labour Hire Licensing Bill?

    The Labour Hire Licensing Bill ensures all providers are legitimate businesses and meet strict licensing standards by -
  • Establishing a licensing system to regulate the provision of labour hire services
  • Imposing penalties on providers who are not licensed, and
  • Imposing penalties on those who procure labour services from non-licensed providers.

  • What labour hire providers need to know

    Existing labour hire providers will have to apply for a licence to operate their business. They will have to provide details about themselves and their business including-
  • Demonstrating those who run the business are ‘fit and proper persons’
  • Registration with the ATO
  • Registration with Work Safe Victoria
  • Number of workers supplied – actual and planned for the next 12 months for a new business.
  • The terms and conditions of those workers
  • The visa status of all workers
  • The industries into which they supply workers
  • Any relevant investigations, incidents or claims
  • Whether they supply accommodation to workers

  • The licence is valid for three years, and is then to be renewed via an official renewal application. Licence holders are subject to inspection and will need to meet mandatory reporting requirements. Any labour hire business that operates without a licence will be subject to fines.

    What host organisations need to know

    If you are hiring resources through a labour hire organisation, you will only be able to use those providers who hold a valid licence. It will be unlawful for a host employer to engage a non-licenced labour hire agency and the Licensing Authority will have the power to issue fines to hosts who do so.

    Operative date

    Victoria’s legislation will commence 1 November 2019, with a six-month transition period from the date of commencement.

    Next steps-

    A Labour Hire Licensing Authority will be established in Victoria, with inspectors having strong investigatory and enforcement powers. Legal obligations will be imposed, backed up by significant civil penalties in Victoria. For hosts and labour providers the Labour Hire Licensing Bill brings widespread changes in the way that resources are purchased.

    Become familiar with the Bill and book in the conversation, sooner rather than later with your host or provider to ensure that you’re compliant and ready for the changes ahead.


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