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Feb 16

Behind With Your Super Payments? How to Catch Up and Avoid ATO Penalties

Falling behind on superannuation payments can have serious consequences for small businesses, including financial penalties and damaged employee trust. If you’re behind on super payments, it’s important to take immediate action to catch up and stay compliant with ATO regulations. Here’s a step-by-step guide to getting back on track.

What Happens If You’re Behind on Super Payments?

If superannuation payments are not paid by the quarterly due date, the ATO may impose a Superannuation Guarantee Charge (SGC). This charge includes:

  • Unpaid Super Amount: The amount of super that should have been paid to employees.
  • Interest on Unpaid Super: Currently set at 10% per annum, calculated from the due date.
  • Administration Fee: $20 per employee per quarter for missed payments.

Steps to Catch Up on Unpaid Superannuation

To resolve unpaid superannuation and minimise penalties, follow these steps:

  • 1. Calculate Unpaid Super: Review payroll records to identify missed super payments and calculate the total amount owed.
  • 2. Lodge an SGC Statement: Complete a Superannuation Guarantee Charge (SGC) statement to report unpaid super to the ATO.
  • 3. Pay the SGC: Pay the SGC directly to the ATO, including unpaid super, interest, and administration fees.
  • 4. Update Payroll Records: Adjust payroll records to reflect paid super and ensure future contributions are calculated correctly.
  • 5. Implement a Payment Plan: If you can’t pay the full SGC amount upfront, contact the ATO to discuss a payment plan.

How to Avoid Falling Behind on Super Payments

Preventing future superannuation issues requires a proactive approach to payroll and financial management. Consider the following strategies:

  • Automate Super Payments: Use payroll software to calculate and pay super automatically each pay cycle.
  • Set Payment Reminders: Schedule reminders for quarterly super due dates to avoid missing payments.
  • Reconcile Payroll Regularly: Review payroll reports to verify that super amounts are accurately calculated and paid.
  • Hire a Bookkeeper: A qualified bookkeeper can monitor super obligations, lodge SGC statements, and ensure compliance.

Superannuation Due Dates to Remember

Superannuation payments are due quarterly. Mark these key dates in your calendar:

  • 1st Quarter (July – September): Due by 28 October
  • 2nd Quarter (October – December): Due by 28 January
  • 3rd Quarter (January – March): Due by 28 April
  • 4th Quarter (April – June): Due by 28 July

Penalties for Late Super Payments

The ATO takes unpaid super seriously. If you fail to pay super on time, you may face the following penalties:

  • Superannuation Guarantee Charge (SGC): Includes the unpaid super, interest, and admin fee.
  • Failure to Lodge Penalty: Additional fines for not lodging an SGC statement on time.
  • Director Penalty Notices: Company directors may be held personally liable for unpaid super.

Need Help Catching Up on Unpaid Super?

If you’re behind on super payments and unsure how to resolve the issue, Northern Beaches Bookkeeping Solutions can help. Our experienced bookkeepers can review your payroll records, calculate unpaid super, and assist with lodging SGC statements to the ATO. Contact us today to get back on track and avoid further penalties.

Payroll & Employees, Superannuation by Coralie Downie
Feb 16

Single Touch Payroll (STP) – A Complete Guide for Small Businesses

Single Touch Payroll (STP) is a payroll reporting system that requires employers to report employee wages, tax withheld, and superannuation contributions to the Australian Taxation Office (ATO) every time payroll is processed. For small businesses, STP simplifies payroll reporting, reduces paperwork, and helps ensure compliance with ATO regulations.

What Is Single Touch Payroll (STP)?

Introduced by the ATO, Single Touch Payroll (STP) is a mandatory payroll reporting system that requires employers to report payroll information directly to the ATO at each pay run. STP covers:

  • Employee wages and salaries
  • PAYG withholding amounts
  • Superannuation contributions

Instead of submitting separate reports at the end of the financial year, STP reports are lodged electronically through STP-enabled payroll software, providing the ATO with real-time payroll data.

Benefits of Single Touch Payroll for Small Businesses

Implementing STP offers several advantages for small businesses, including:

  • Streamlined Reporting: Reduces paperwork and manual data entry, as payroll information is reported automatically each pay cycle.
  • Improved Compliance: Ensures accurate and up-to-date payroll data is submitted to the ATO.
  • Employee Transparency: Employees can access their year-to-date income, tax, and super information through MyGov.
  • Reduced Risk of Penalties: Timely reporting reduces the risk of ATO penalties for late or inaccurate payroll reporting.

How to Set Up Single Touch Payroll (STP)

To implement STP for your small business, follow these steps:

  • 1. Choose STP-Enabled Payroll Software: Select payroll software that is ATO-compliant and supports STP reporting, such as Xero, MYOB, or QuickBooks.
  • 2. Register for STP Reporting: Notify the ATO that you will be using STP by updating your payroll software settings.
  • 3. Collect Employee Information: Ensure that employee records include accurate information, such as Tax File Numbers (TFNs), superannuation details, and pay rates.
  • 4. Configure Payroll Settings: Set up payroll categories, pay cycles, and tax codes in the software.
  • 5. Conduct a Test Run: Run a test payroll to confirm that data is reported accurately to the ATO.

Understanding STP Phase 2 – What’s New?

STP Phase 2 introduces additional reporting requirements, including:

  • Reporting income by income type (e.g., salary, allowances, bonuses)
  • Separating tax treatment codes for different income streams
  • Including child support deductions and garnishees

Businesses must ensure their payroll software is updated to meet STP Phase 2 requirements to avoid non-compliance penalties.

STP Reporting Deadlines

STP reports must be lodged each pay cycle, typically on the same day payroll is processed. The ATO provides some flexibility for small businesses, allowing them to lodge reports within 24-48 hours of processing payroll. End-of-year finalisation must be completed by 14 July.

Common STP Mistakes to Avoid

  • Failing to report superannuation contributions
  • Incorrect employee details (e.g., TFNs or pay rates)
  • Not marking the STP report as “Final” at the end of the financial year
  • Reporting incorrect pay dates or pay cycles

What If You Miss an STP Report?

If you miss an STP report, notify the ATO immediately to avoid penalties. Correct the missed report by lodging an amended STP report, ensuring that all payroll data is accurate and complete.

Need Help With STP Reporting?

Implementing and maintaining STP can be challenging, especially with new Phase 2 requirements. At Northern Beaches Bookkeeping Solutions, we provide expert payroll support to ensure your business remains compliant. Contact us today to learn more about our payroll and STP reporting services.

Payroll & Employees, Single Touch Payroll by Coralie Downie
Feb 16

Do You Export Goods or Services in Australia? Essential Bookkeeping Tips for Australian Businesses

If your business exports goods or services, it’s important to understand how to manage bookkeeping and tax compliance effectively. From GST exemptions to foreign currency transactions, here’s a comprehensive guide to bookkeeping for businesses involved in exporting from Australia.

What Are Exported Goods and Services?

Exported goods and services refer to products and services sold to overseas customers. In Australia, exports are generally GST-free, meaning you do not charge GST on sales to international customers. However, accurate record-keeping is essential to substantiate GST-free claims and comply with ATO requirements.

Key Bookkeeping Considerations for Exporting Businesses

Exporting goods and services can complicate bookkeeping processes, particularly when dealing with foreign currencies, international shipping, and tax exemptions. Here are the key considerations for effective bookkeeping:

  • 1. Record All Export Sales: Maintain accurate records of all export transactions, including invoices, shipping documents, and payment receipts.
  • 2. Track Foreign Exchange Rates: If you receive payments in foreign currencies, record the exchange rate at the time of the transaction for accurate reporting.
  • 3. Apply GST Exemptions Correctly: Confirm that the goods or services qualify as GST-free exports and apply the correct GST codes in your accounting software.
  • 4. Manage Shipping and Freight Costs: Record shipping and freight costs separately to track expenses and manage cash flow effectively.
  • 5. Document Proof of Export: Retain proof of export, such as shipping documents and customs declarations, to substantiate GST-free claims.

GST Implications for Exported Goods and Services

Exports of goods and services from Australia are typically GST-free, but businesses must maintain documentation to substantiate the GST exemption. To qualify for GST-free treatment, the goods must be exported within 60 days of payment or invoice, whichever occurs first.

Common GST-free export items include:

  • Physical goods exported to overseas customers
  • Services performed for customers located outside Australia
  • International freight and logistics services
  • Software and digital products supplied to international clients

Handling Foreign Currency Transactions

If your business receives payments in foreign currencies, you must convert the amounts to Australian dollars (AUD) for reporting purposes. The ATO allows you to use the exchange rate on the day of the transaction or a specific rate determined by your accounting software provider.

Be sure to record:

  • The foreign currency amount received
  • The applicable exchange rate
  • The AUD equivalent for financial reporting and GST calculations

Export Documentation and Record-Keeping

Maintaining accurate records is crucial for businesses involved in exporting goods and services. Ensure you keep the following documents for at least five years:

  • Invoices and shipping documents for export sales
  • Customs declarations and export permits
  • Proof of payment, including bank statements and remittance advices
  • Exchange rate records for foreign currency transactions

Tax Implications for Exporting Services

While most goods exported from Australia are GST-free, some services may be subject to GST. Ensure that you verify the GST treatment of exported services, particularly when dealing with digital products, intellectual property, or consulting services provided to overseas clients.

Need Help Managing Export Transactions?

Exporting goods and services adds a layer of complexity to bookkeeping and tax reporting. At Northern Beaches Bookkeeping Solutions, we assist businesses with accurate record-keeping, GST management, and financial reporting for export transactions. Contact us today to ensure your business remains compliant and financially organised.

Posts by Coralie Downie
Xero Software Setup Specialists - Northern Beaches Bookkeeping Solutions
Jan 20

What Does a Bookkeeper Do? Essential Tasks and Benefits for Small Businesses

Bookkeepers play a crucial role in managing the financial records of small businesses. From recording daily transactions to preparing financial reports, bookkeepers ensure that businesses stay financially organised and compliant. But what exactly does a bookkeeper do? Here’s a comprehensive overview of the key tasks and responsibilities of a bookkeeper.

What Is a Bookkeeper?

A bookkeeper is responsible for maintaining accurate financial records, including tracking income and expenses, reconciling bank statements, and managing payroll. They provide essential financial data that business owners rely on to make informed financial decisions, prepare for tax time, and assess cash flow.

What are the Key Responsibilities of a Bookkeeper?

Bookkeepers perform various tasks to keep a business’s financial records up to date. Here are the primary responsibilities:

  • 1. Recording Transactions: They record all financial transactions, including sales, purchases, payments, and receipts. They categorise expenses and income to ensure accurate reporting.
  • 2. Bank Reconciliation: They reconcile bank statements to verify that all transactions have been recorded accurately and to identify discrepancies or errors.
  • 3. Payroll Processing: They calculate employee wages, withhold tax, and process payroll payments. They also track employee leave and entitlements.
  • 4. Accounts Payable and Receivable: They manage invoices, track outstanding payments, and follow up on overdue accounts to maintain cash flow.
  • 5. BAS Lodgement: Registered bookkeepers prepare and lodge Business Activity Statements (BAS) to report GST, PAYG, and other tax obligations to the ATO.
  • 6. Financial Reporting: They generate financial reports, such as profit and loss statements, balance sheets, and cash flow statements, to provide insights into business performance.
  • 7. Managing Cash Flow: They monitor cash flow, identify potential cash shortages, and recommend strategies for managing cash reserves.
  • 8. Maintaining Records: Accurate record-keeping is essential for tax reporting and financial audits. They ensure that financial records are well-organised and accessible.

Why Hire a Bookkeeper?

Hiring a bookkeeper can save time, reduce stress, and ensure that your business remains financially compliant. Here are the top reasons to hire a bookkeeper:

  • Time Management: Free up time to focus on growing your business instead of managing paperwork.
  • Accuracy: Reduce the risk of financial errors that could lead to costly tax penalties.
  • Compliance: Stay compliant with ATO regulations for GST, PAYG, and BAS lodgements.
  • Cash Flow Management: Ensure that invoices are paid on time and expenses are tracked effectively.
  • Financial Insights: Access accurate financial reports to make informed business decisions.

How to Choose the Right Bookkeeper

When selecting a bookkeeper, consider the following:

  • Experience: Look for a bookkeeper with experience in your industry.
  • Qualifications: Ensure they are registered BAS agents if they will be lodging BAS on your behalf.
  • Software Knowledge: Choose a bookkeeper familiar with accounting software like Xero, MYOB, or QuickBooks.
  • Communication: Select someone who provides clear and timely financial updates.

How Bookkeepers Support Small Business Growth

Their role extends beyond data entry and record-keeping. They provide valuable insights into cash flow, profitability, and financial trends, helping business owners make strategic decisions that drive growth. With accurate financial records, business owners can identify opportunities for cost reduction, improve budgeting, and plan for expansion.

Need a Reliable Bookkeeper for Your Small Business?

If you’re struggling to keep up with financial records or need support with payroll and BAS lodgements, Northern Beaches Bookkeeping Solutions can help. Our experienced bookkeepers provide comprehensive bookkeeping services to keep your business financially organised and compliant. Contact us today to learn more.

Northern Beaches Bookkeeping Solutions Posts by Coralie Downie
Jan 10

Uniforms and PPE – Tax Deductions for Small Businesses

Providing uniforms and personal protective equipment (PPE) is essential for maintaining workplace safety and professionalism. But can you claim uniforms and PPE as tax deductions for your business? Here’s what you need to know to stay compliant and maximise tax savings.

Are Uniforms and PPE Tax-Deductible?

Yes, uniforms and PPE can be tax-deductible for businesses, but certain conditions must be met. According to the Australian Taxation Office (ATO), you can claim a tax deduction for:

  • Compulsory Uniforms: Clothing that is a specific requirement for work, such as branded uniforms or industry-specific attire.
  • Non-Compulsory Uniforms: Optional uniforms that are registered with AusIndustry.
  • PPE: Protective clothing, safety boots, gloves, masks, and other equipment necessary for workplace safety.

What Cannot Be Claimed as a Uniform or PPE Expense?

The ATO does not allow deductions for the following:

  • Clothing that is not work-specific, such as casual wear or everyday business attire.
  • Expenses related to conventional clothing, even if purchased for work purposes.
  • Personal items such as cosmetics or grooming products.

Record-Keeping for Uniform and PPE Deductions

To claim a deduction for uniforms and PPE, you must keep accurate records, including:

  • Receipts and invoices for purchased items
  • Proof of payment, such as bank statements or credit card records
  • Documentation showing that uniforms and PPE are compulsory or registered with AusIndustry

How to Claim Uniform and PPE Expenses

To claim uniform and PPE expenses on your tax return:

  • 1. Gather Records: Collect all receipts, invoices, and documentation related to uniforms and PPE purchases.
  • 2. Categorise Expenses: Separate compulsory uniforms, non-compulsory uniforms, and PPE expenses.
  • 3. Calculate Deductions: Sum up eligible expenses and ensure they meet ATO guidelines.
  • 4. Include in Tax Return: Report the expenses under work-related clothing and PPE expenses.

PPE Expenses During COVID-19

Due to the COVID-19 pandemic, the ATO allows businesses to claim deductions for PPE such as masks, gloves, and sanitiser if they are required for work. Ensure that these expenses are clearly documented as work-related to qualify for deductions.

Benefits of Providing Uniforms and PPE for Employees

Beyond tax deductions, providing uniforms and PPE offers several benefits for businesses:

  • Brand Visibility: Branded uniforms increase brand recognition and create a professional image.
  • Workplace Safety: PPE reduces the risk of workplace injuries and accidents.
  • Employee Satisfaction: Employees appreciate receiving high-quality uniforms and safety gear at no personal cost.

Need Help Managing Uniform and PPE Expenses?

Managing uniform and PPE expenses can be complex, especially when it comes to record-keeping and tax deductions. At Northern Beaches Bookkeeping Solutions, we provide comprehensive bookkeeping services to help you track expenses, claim eligible deductions, and maintain ATO compliance. Contact us today to learn more.

Northern Beaches Bookkeeping Solutions Posts by Coralie Downie
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