Nailing tax and super as an employer
As the end of the year is upon us, here is some tax and super info to help you during your busy holiday period.
Fuel your knowledge on car fringe benefits
Some of your employees may spend most of their day driving from site to site. But, did you know that if your employees use a business car for private purposes, you may be providing a car fringe benefit?
A car is treated as being available for your employee’s private use when it is:
- not at your premises and they are allowed to use it for private purposes
- garaged at their home – regardless of whether they have permission to use it for private purposes.
Generally, travel to and from work is private use of a vehicle.
If you’re not sure if you’re providing a car fringe benefit, there are a number of resources available on the ATO’s website to help you – including a video series and webinar sessions. These resources explore:
- how to determine whether you’re providing a car fringe benefit
- how to calculate your car fringe benefits
- what records to keep
- how to correctly report car fringe benefits on your FBT return, and
- key lodgment and payment due dates for your FBT return.
You can access these by visiting ato.gov.au/carFBT.
There are also some circumstances where an employer’s FBT obligations relating to cars may have changed as a result of COVID-19. Visit ato.gov.au/COVIDFBT to learn more.
Stepping up to pay super
Paying super is an important part of being an employer, as it provides for your employees’ future and their retirement.
Generally, all employees are eligible for super. It doesn’t matter if they’re an apprentice or a family member working for you. Some contractors are also eligible for super if they meet the additional eligibility requirements.
If you’re ever unsure if a worker is eligible for super contributions, you can use the super guarantee eligibility decision tool on the ATO website.
Once you’ve worked out who’s eligible for super, you’ll need to start paying super.
One thing you’ll want to avoid is having to lodge and pay the super guarantee charge to the ATO. To prevent your business from being hammered by significant costs and penalties that come with the charge, you’ll need to make sure you pay super for your employees:
- on time or by the quarterly due date
- at the right amount, such as the new rate of 10%, and
- to the right super fund.
So, which is the right super fund?
When you take on an employee, you more than likely need to offer them a choice of super fund and make super payments to that chosen fund.
Before 1 November 2021, where your employee didn’t make a choice, you could pay their super to your employer default fund. Now, if a new employee doesn’t choose a super fund, most employers will need to request the employee’s stapled super fund details from the ATO.
For those who aren’t familiar with the new term ‘stapled super fund’, it’s an existing super account that is linked (or ‘stapled’) to an individual employee so that it follows them as they change jobs. It will help to reduce account fees for your employees by stopping new super accounts from being opened every time they start a new job.
Remember, you only need to request stapled super fund details if you have a new employee start on or after 1 November and they don’t choose a super fund.
For all your super info, visit ato.gov.au/Superforemployers
If you’re having difficulty paying your tax or super on time, contact the ATO, as they have support available that suits your circumstances, such as payment plans, to get back on track.
You can find out more at ato.gov.au/Helpwithpaying