eSignature Legitimateness for Payroll Deduction Authorization in Australia

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Hi, I am Kate. Are you feeling a little confused about what taxable wages are for payroll tax purposes? It's important to understand what taxable wages are. This is so you don't under or overstate your wages when you lodge your payroll tax return. To help with this I'll pop back in from time to time to clarify certain points in this video. Hi Mary, you're in early. That's a lot of paperwork, is everything OK? Well you know how I'm covering for Ted while he's going on extended leave, I'm feeling a little bit anxious about what's taxable and example payroll tax. Mmm, Ted's not in today so how about I go through some information with you? Are you free later this afternoon? Yes that would be great. OK, I mean okay. First I'll email you where to find information on payroll tax and wages and I'll givce you a call to confirm later on today. Yes I've gone to the Office of State Revenue website and I accessed all the resources that you mentioned. It's cleared up a lot of questions but I do still need some clarifications on a few topics. Yep, uh-huh, OK great, I'll see you then. I thought it would be better to book a meeting room to avoid interruptions. Yeah I can sneak out early, no one's gonna know when I sneak out.... Now where was I? Ahh yes, can you access the Revenue Online and Department of Finance website on the laptop for me? I'll get you to explain what you know and where we can go from there. That sounds great. Let's start with gross salaries and wages and tell me what's included here? So I need to include the gross amount paid to an employee including any leave payments such as annual leave, sick leave and long service leave. Also pay as you go withholding amounts and other deductions made on their behalf. That's great, remember that any wage subsidies you receive also need to be included otherwise you could be under declaring our wages. Do you have any contractors or consultants wages to include? Contractors, no I don't think we have any contractors working for us. Commissions, bonuses and allowances are up next. What can you tell me about these? I know what commissions and bonuses are and that they're taxable. I was a little confused about the difference between an allowance and a reimbursement though. Let's go to the Payroll Tax Employer Guide on the Department of Finance website. I'll explain what an allowance is and we can take a look at reimbursements. Okay, an allowance is a fixed amount paid to someone on top of their salary, for a number of reasons.It could be to cover related expenses or even in recognition of special duties. Let's have a look at what the guide says about reimbursements. Reimbursements of expenses incurred by an employer but paid upfront by the employee are not taxable unless they have a taxable value under the Fringe Benefits Tax Assessment Act 1986. A reimbursement of an expense is not subject to payroll tax if the reimbursement has all of the following characteristics. At the time of payment the expense has already been incurred by the employee, the expenditure by the employee was incurred in the course of the employers business and the precise amount is reimbursed. Exemptions are provided for reasonable motor vehicle and overnight accommodation allowances, as set by the Australian Taxation Office. So what do you know about superannuation? Can you tell me what has to be included? I need to include all pre-tax contributions to super funds. Yep but did you know that you also need to include any contributions made under a salary sacrifice arrangement, as well as non monetary contributions. Oh I didn't know that. There's so much to be aware of. I know. I refer to the Payroll Tax Employer Guide when I need to or if I'm really I'm sure, I'll send a web inquiry to the Office of State Revenue. You can submit a web enquiry quickly and easy via our website. When referring to any fact sheets or other documents on our website, always view the electronic version. This will ensure you're reading the most up-to-date information. Now let's go back to Paul and Mary to see how they're going. I was hoping you could explain fringe benefits to me. I've spoken to Ted and he's told me to use the estimated amount that has gone in the previous return. Do you know how this was worked out? I also found this quite confusing at first. The way it was explained to me was that a fringe benefit is a non-cash payment an employer provides a worker in respect of their employment. There's a handy video about fringe benefits calculation on YouTube that cleared up a lot of my questions. Have a look at that to start with and if you still aren't sure give me a call. OK I'll check it out. I see next is directors remuneration, I think I'm OK with this. What would you put here? Things like directors fees, allowances superannuation contributions, the granting of shares or options. That's great, I can see you've been doing some reading today. Other things to be included taxable fringe benefits and any employment termination payments. It's important to note that you also need to include non-working directors as they're often missed out and remember that profit distribution isn't taxable. Termination payments are next, I'm not entirely sure about these and I know we have a few people retiring in a couple of months. OK, let's go back to the Payroll Tax Employer Guide as that lists what's captured under termination payments. Certain payments paid or payable to an employee as a consequence of the retirement from or termination of employment, are subject to payroll tax. An employee termination payment is a lump sum payment made to an employee when they cease working for an employer, and can include: pay in lieu, unused sick leave, golden handshakes and severance payments plus any unused leave entitlements. Genuine redundancy and early retirement payments are not liable for payroll tax. Be aware that a voluntary redundancy is not classed as a genuine redundancy and all payments made in relation to it would be liable for payroll tax. The general rule is that what's taxable for the Australian Taxation Office is subject to payroll tax. Okay, so I know where to go for information when I next have someone leave. Can you explain what specified taxable benefits are, I haven't heard of these before? Neither had I. The're contributions to industry redundancy funds and portable long service leave funds, which are common in the construction industry. We don't have any of these but if we did, they would be subject to payroll tax. Okay so we're up to the last topic for taxable wages, shares. I know we declare these when our directors are issued shares each quarter, but not much else. If you go to the Payroll Tax Employer Guide again, we can go through the section on shares. The payroll tax liability arises on the relevant day as chosen by the employer. There are two options: the grant day or the vesting day. The grant day is when the employer grants the shares to the employee share scheme. If the employer doesn't declare the shares on the grant day then the liability will default to the vesting day. The vesting day is when the employee has control over the shares or seven years later, whichever comes first. Thanks so much for going through all this with me. There's a lot to know but at least now I have a clearer understanding and know where to access information. Do you have time to go through the exempt wages? Let me check my calendar and we can organize another catch-up. So that covers taxable wages. If you want further information about wages you can refer to a number of resources on our website. There's the Payroll Tax Employer Guide, which is a comprehensive interactive and easy to use document, as well there's a number of fact sheets and revenue rulings. The Office of State Revenue also offers free information seminars relating to payroll tax. For any payroll tax queries, you can visit the Department of Finance website or send through a web enquiry via .osr.wa.gov.au/payrollenquiry. You can also call our office on 9262 1300. WA country callers can phone 1300 368364. Thanks for joining us, see you again soon.