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Employee obligation checklist

Employee obligation checklist

1. Have all of your employees completed a tax file number declaration?

Yes

No

2. Have you offered your employees a superannuation choice?

Yes

No

3. Do you make super guarantee payments four times a year?

Yes

No

4. Do you understand the difference between a contractor and an employee for tax purposes?

Yes

No

5. Do you know when a contractor is entitled to super guarantee payments?

Yes

No

6. Do you have copies of relevant awards for your employees?

Yes

No

7. Are you withholding income tax?

Yes

No

8. Do you have a current workers' compensation policy?

Yes

No

9. Do you have a written occupational health and safety policy?

Yes

No

10. Do you maintain accurate wage records for payroll tax purposes?

Yes

No

11. Do you provide pay slips with each employee's pay?

Yes

No

12. Do your payslips fulfil the requirements in your state?

Yes

No

13. Do you know whether you provide taxable fringe benefits to employees?

Yes

No

14. If you bought the business, do you have a statement of existing employee liabilities?

Yes

No

If you answered "no" to any of these questions or want to be sure you have everything covered, read on.

  • Most of your employees, whether full-time, part-time or casual, will be covered by the superannuation guarantee legislation. Generally, you have to pay super for your employees if they are:
    • Aged 18 and over
    • Paid $450 or more before tax in a calendar month. Employees who are under 18 years old must also work at least 30 hours per week.
    • Eligible contractors are also entitled to super guarantee payments, even if they have an Australian Business Number (ABN)
  • You are required to make superannuation guarantee contributions at least four times a year, totaling 9.25% of each worker’s salary over the year
  • If you don't make contributions by the cut-off dates for each quarter, you'll face penalties
  • You need to offer a choice of superannuation fund such as Essential Super or FirstChoice Employer Super. Both of these funds are MySuper compliant.
    From 1 January 2014 you are required to make superannuation Guarantee contributions to a MySuper product, where your employee has not selected their own superannuation fund.
  • If you are self-employed, you don't have to make super contributions to a super fund for yourself
  • You may wish to consider super as a way of saving for retirement
  • Most self-employed people can claim a full deduction for contributions they make to their super until age 75

  • A tax paid by employers on certain benefits provided to their employees
  • Separate from income tax and based on the taxable value of the fringe benefits you provide
  • If your business provides fringe benefits to employees you need to:
    • Register for FBT
    • Understand which benefits are subject to FBT
    • Keep FBT records
    • Calculate how much FBT you have to pay
    • Lodge a return and pay FBT to the Australian Tax Office (ATO)
    • Report fringe benefits on your employees' payment summaries

  • Under the Pay As You Go (PAYG) system, you're legally required to withhold income tax from your employees’ salaries
  • You have to withhold an amount from their wages and send it to the ATO
  • As a new employer, you must register with the ATO before you withhold tax from payments to your employees
  • You do not need to withhold tax from payments to contractors
  • But if a worker quotes an ABN, it doesn't mean that they're a contractor. Whether they are an employee or contractor depends on the circumstances of how you engage them, and how the work is performed
  • The ATO has a checklist to help determine if someone is an employee or contractor

  • Insures employees against injury or death caused in the workplace
  • Injured workers can receive weekly payments to cover loss of earning capacity, payment of medical expenses and vocational rehabilitation, and assistance in returning to work
  • As an employer you must:
    • Maintain a safe workplace
    • Maintain workers' compensation insurance
    • Protect yourself and your workers from financial hardship in the event of a workplace injury
  • An employer who does not have a current policy may be prosecuted and be liable for steep fines, if found guilty of an offence
  • If a worker is injured, uninsured employers may be held responsible to pay the full cost of compensation
  • You should have an occupational health and safety policy in place, and all employees should read it before they start working for you
  • Employers and staff have obligations to ensure a workplace is safe, so it's important to make sure your employees are informed

  • A state tax on the wages paid by employers
  • Calculated as a percentage of the wages you pay each month
  • You must pay payroll tax if your total Australian wages bill exceeds the exemption threshold that applies in your state or territory
  • Your local revenue office can give you more information about the payroll tax rate and threshold that applies to you

  • Must specify each worker's gross pay, the tax withheld and compulsory superannuation contributions
  • Requirements vary depending on state or territory legislation or the award you pay your employees under

  • Where you buy a business and keep the existing employees, you may become responsible for any employee liabilities which have accrued up until the date of the sale
  • Your responsibilities regarding the re-employment of staff should be outlined in the sale contract
  • It's a good idea to obtain a list of employees from the seller, including their salary and entitlements and copies of job descriptions, employment contracts, and other paperwork
  • Check out  relevant awards, agreements and legislation for a full picture of accrued entitlements such as annual leave, sick leave and long-service leave
  • Check whether compulsory superannuation payments and workers' compensation premiums have been paid

  • Talk to relevant State or Commonwealth authority
  • Get advice from an industrial relations lawyer
  • Be prepared because penalties for making a mistake can be significant

Keep reading

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Buying a business checklist

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Important information


This document is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of interests in FirstChoice Employer Super offered from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. It is also the Trustee and issuer of interests in Commonwealth Essential Super ABN 56 601 925 435. Colonial First State is a wholly owned subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 (‘the Bank’). An investment in FirstChoice Employer Super or Essential Super is not an investment in, deposit with or other liability of the Bank or its subsidiaries and they do not guarantee the performance of either fund. Your investment is subject to risk, loss of income and capital invested. All other products mentioned on this web page are issued by the Bank. View the Bank’s Financial Services Guide (PDF 59kb).

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