2017 Tax Planning Checklist: Employment Issues

PAYG Withholding Tax

You must prepare a Withholding Tax Summary at the end of June, to reconcile the total amount of deductions made from employees' wages during the year with the total of remittances paid to the ATO.

Payment Summaries

Payment Summaries must be prepared and sent to all employees by 14 July each year. The total of income tax deducted, as indicated on the Payment Summaries, must reconcile with the PAYG Withholding Reconciliation and the amount of PAYG Withholding that has been forwarded to the Australian Taxation Office.

Final date for lodgement of the PAYG Withholding Payment Summary annual report for payers who have had money withheld from salary and wages and other payments (Activity Statement label W2) is 14 August. Lodgement concessions may apply where Moore Stephens assists you with the preparation of this reconciliation.

Payroll Tax (If You Are Liable)

You should check the total wages paid (including your salary, contractor payments, fringe benefits superannuation and directors' fees), against the maximum exemption for Payroll Tax in your state.

At the end of the financial year, you should prepare a reconciliation of your total payroll for the year showing the total amount of payroll tax payable and then reconcile this with the remittances that you have forwarded monthly.  Any shortfall must be adjusted by no later than 21 July.

WorkCover/Workers' Compensation

A WorkCover Declaration must be lodged with the appropriate authority or insurance company certifying the wages paid for the period of insurance.

Fringe Benefits Tax

The Fringe Benefits Tax year ends on 31 March each year.

If you are paying fringe benefits you must lodge a Fringe Benefits Tax Return normally by 21 May. If you are lodging your Fringe Benefits Tax Return via Moore Stephens, you normally have until 28 May to pay any tax due and a lodgement extension to 25 June.

You should ensure that accurate records are maintained of all items that are subject to FBT. The following benefits are subject to Fringe Benefits Tax:
  • Airline Travel Benefits
  • Board Benefits
  • Car Benefits
  • Car Parking Benefits
  • Debt Waiver Benefits
  • Expense Payment Benefits
  • Housing Benefits
  • Living Away from Home Benefits
  • Loan Benefits
  • Meal Entertainment Benefits
  • Property Benefits
  • Residual Benefits
  • Tax Exempt Organisation Entertainment Benefits FBT will be levied on the GST inclusive value of the benefit.
The cost of the benefit and the FBT paid may be tax deductible to the provider of the benefit.

Living Away from Home Allowance

The Living Away from Home Allowance is paid by an employer to workers, to compensate them for additional expenses such as accommodation, food and creative comforts, whilst living away from home for work expenses.

For employees who are living away from home and maintaining a home in Australia, they are not required to include the allowance in their assessable income.
A twelve-month limit applies on how long an employee can receive a tax concession for living away from home, whilst working away from home.

Fly-In-Fly-Out (FIFO) arrangements are not affected by the twelve-month time limit rule. Travel and meal allowances, which are provided to employees who travel from their usual place of work for short periods of up to twenty-one days, are not treated as living away from home allowances.
Employers are required to pay fringe benefit tax on parts of the allowance that are not tax-free.