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Super for different visas

Posted on September 18, 2019 by admin


Australian employers are required to pay super to their employees when they earn $450 a week or meet specific criteria based on age or industry. Employer requirements can get confusing however when dealing with international workers or sending employees overseas. Here are the requirements employers must follow when handling super payments to workers with different visas. Temporary residents:Temporary residents working in Australia may be eligible to receive super from their employer. Eligibility criteria are the same as it would be for a permanent Australian resident, you must be 18 years or older and have been paid $450 or more (before tax) in a month. Working holiday makers holding a 417 (Working Holiday), 462 (Work and Holiday) or an associated bridging visa can access the super paid as a departing Australia superannuation payment (DASP). Employees working overseas:For an Australian employee sent to work overseas, their employer must continue to pay super contributions in Australia for them. The other country may require the employer or employee to pay super there as well if Australia does not have a bilateral agreement with that country. To gain exemption from the super payment in the other country, the employer needs to show the authorities in […]


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New industries included under TPAR 

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The taxable payment reporting system (TPRS) has extended to further businesses that provide particular services and those that pay contractors to provide the service. The extension was approved on 1 July 2019. Road freight services, information technology services and security, surveillance and investigation services will now have to lodge taxable payments annual report (TPAR), even if those services only make up part of the business. Contractors can include subcontractors, consultants and independent contractors. For these businesses, the first TPAR will be due on 28 August 2020. This will be for payments that have been made to contractors in the 2019–20 financial year for providing the relevant services. Business owners will now need to keep records of contractor payments made from 1 July 2019. Exemptions from TPRS reporting obligations apply if payments received are less than 10% of the entity’s GST turnover in the following industries: Courier services and road freight services (combined). Cleaning services. Security, investigation or surveillance services (combined). IT services. Businesses that are not required to lodge should complete a TPAR Not Required to Lodge form for the ATO to update their records, preventing any unnecessary follow up.


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Salary sacrificing super

Posted on September 10, 2019 by admin


Contributing extra to your superannuation is a good way to boost your retirement funds. One of the ways you can add more to your super is through salary sacrificing. Salary sacrifice is an arrangement with your employer to forego part of your salary or wages in return for your employer providing benefits of a similar value, meaning your employer will redirect some of your salary or wages into your super fund instead of to you. The salary sacrificed amounts count towards your concessional contributions cap, in addition to your employer’s compulsory contributions such as super guarantee payments and salary-sacrificed amounts sent by you to your employee’s super fund. The annual concessional contributions cap is $25,000 for everyone and these salary sacrifice contributions are taxed at a maximum rate of 15%. If you have more than one fund, all concessional contributions made to all of your funds are added together and counted towards the concessional contributions cap. Concessional contributions in excess of these caps are subject to extra tax. Salary-sacrificed amounts are paid from pre-tax salary so they don’t count as non-concessional contributions and will not be considered a fringe benefit if the super contributions are made to a complying super […]


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What is a CGT event?

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Capital Gains Tax (CGT) events occur when an individual or company makes a capital gain or capital loss by selling or disposing of an asset they own. The timing of a CGT event is quite important, as it determines which income year an individual will report the capital gain or capital loss, and may affect how their tax liability is calculated. CGT events can happen when: Selling or giving away an asset. The destruction or loss (voluntary or involuntary) of a CGT asset. Receiving compensation for the loss, destruction or compulsory acquisition of a CGT asset. The disposal of a depreciating asset used for non-taxable (private) purposes. Capital distributions to company shareholders or unitholders in a unit trust or managed fund. Shares or units being cancelled, surrendered, redeemed or declared worthless. You stop being an Australian tax resident. You enter into an agreement not to work in a particular industry for a set period of time A trustee makes a non-assessable payment to you from a managed fund or other unit trusts. A company makes a payment (not a dividend) to you as a shareholder. When a CGT asset is disposed of, the CGT event usually takes place when a […]


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Diversification requirements for SMSFs

Posted on September 3, 2019 by admin


The ATO has identified approximately 17,700 SMSFs where investment strategies may not meet the requirements under regulation 4.09 of the Superannuation Industry Supervision Act (SISA). Records show these SMSFs may hold 90% or more of funds in one asset, or a single asset class. Diversification aims to maximise an individual’s return by investing in different asset classes that react differently to the same event. Although it does not guarantee avoiding a loss, diversification is an important component of reaching long-term financial goals while minimising risk. This can help to control a super fund’s risk, as the better performing asset classes will help offset the others that aren’t performing very well. Diversification also provides the super fund with the opportunity for long-term growth, as the portfolio is exposed to asset classes with strong growth potential. SMSF trustees that don’t have the appropriate blend of different asset classes in their fund risk their portfolio experiencing increased and unnecessary volatility. Well-diversified SMSFs include all the major asset classes including cash, fixed interest, shares and property. To help ensure an SMSF is properly diversified, consider the exposures the fund currently has to the major asset classes and assess how diversified the fund is. Trustees […]


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Reestablishing lost or damaged records

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Taxpayers are responsible for safely storing a written backup copy of their tax record in case the original electronic form becomes inaccessible or unreadable. In the event that your records have been damaged or destroyed, there are a number of ways you can reconstruct them. Where the tax records are accidentally lost or destroyed from a burglary or fire, the ATO will allow a taxpayer to claim a deduction for certain expenses, provided that: The taxpayer has a complete copy of a lost or destroyed document. The ATO is satisfied that the taxpayer took reasonable precautions to avoid the loss or destruction of the form. If the tax record was a written document, it is not reasonably possible to attain a substitute document. Taxpayers keep a record of these circumstances and inform the ATO in writing to back up the claim. The ATO holds and can re-issue or supply copies of tax documents, such as: Income tax returns. Activity statements. Notices of assessment. If you have lost your TFN, you can still access your tax information by phoning the ATO. They will allow for other information to verify identity, such as an individual’s date of birth, address or bank account […]


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Succession planning for your SMSF

Posted on August 28, 2019 by admin


A mandatory component of managing a self-managed super fund (SMSF) is planning out what will happen to the fund if its trustee were to pass away. While succession planning may not be one of the first responsibilities that comes to mind when managing an SMSF, it is a necessity that can provide certainty and peace of mind for a deceased trustee’s family. Succession planning can become complex if little or no attention is paid to it on an ongoing basis, but there are ways trustees can ensure the best outcome for both the fund and their family. One option for a sole member fund is to appoint another trustee. Note that the non-member trustee cannot be the employer of the member unless they are related. This would not be an option for a fund with two members as the available exemptions only apply to single member funds. Those who appoint a family member or close friend must consider first whether they are suitable for a role; running an SMSF requires expertise and knowledge, and appointing someone with limited experience may not be in the best interest of the fund’s future. Some SMSF trustees may also choose to appoint an enduring […]


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Non-compliant payments to workers no longer tax deductible

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Businesses can no longer claim deductions for payments to workers if they have not met their pay as you go (PAYG) withholding obligations. This applies to income tax returns lodged for the 2020 income year onwards. Any payments made to a worker where PAYG amounts haven’t been withheld or reported are called non-compliant payments. If PAYG withholding rules require an amount to be withheld, businesses will need to: Withhold the amount from the payment before they pay their worker. Report that amount to the ATO. Businesses will not lose their deduction if they: Withhold an incorrect amount by mistake. To minimise penalties businesses can correct the mistake by lodging a voluntary disclosure form. Withhold the correct amount but make a mistake when reporting, though mistakes should be corrected as soon as possible. Fail to report payments on a Taxable payments annual report (TPAR) or a payment summary annual report (PSAR). Businesses will only lose their deduction if no amount is withheld or reported to the ATO unless voluntarily disclosed before the ATO examine their affairs. Businesses that don’t comply with PAYG withholding and reporting obligations may lose the deduction for that payment and face penalties that apply for failure to […]


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What to look for when choosing a super fund

Posted on August 19, 2019 by admin


Over the course of your life, the contributions made to your superannuation fund can often end up being your greatest asset. Because of this, selecting a super fund is an important decision, choosing a fund with the right investment strategies for you could be the difference between retiring comfortably or not. There are five different types of superannuation fund to choose from but not all options are available to everyone. SMSFs:Self-managed super funds (SMSFs) are those where the trustee is responsible for managing and making regular contributions to the fund. This option allows for more responsibility in terms of administration, compliance and investment decisions. Industry funds:Industry funds generally cater to employees from a specific industry although they are open to everyone. Industry funds are not-for-profit, meaning they have historically charged lower fees on average with profits funnelled back into members’ funds. Retail funds:Retail funds are offered to everyone and are usually run by investment companies or banks. A portion of the profits derived from the activities of retail super funds then goes to the shareholders. Corporate funds:Corporate funds are offered to specific corporations or if you are employed by a particular employer. They often return profits to their members (although […]


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FBT car parking threshold changes

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The ATO has released the Taxation Determination 2019/9, which outlines changes to the fringe benefits tax (FBT) car parking threshold. The car parking threshold for the year commencing on 1 April 2019 is $8.95. This replaces the amount of $8.83 which applied to the FBT year ended 31 March 2019. The increase has been set by adjusting the previous year amount by a factor equivalent to the movement in the Consumer Price Index (1.3%). Section 39A of the Fringe Benefits Tax Assessment Act 1986, sets out a number of conditions that must be met before car parking facilities provided by an employer to their employees will be subject to FBT. These conditions include: A commercial car parking station is located within a one-kilometre radius of the employer-provided car park. The lowest fee charged by the car park operator is more than the car parking threshold. The car is parked for more than four hours between 7 am and 7 pm on any day. There are circumstances where car parking benefits are exempt from FBT. These exemptions may apply to: Employers who meet the conditions of a small business entity. Institutions of certain research, education, religion and charity. Employees with a […]


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Super for different visas

September 18, 2019

Australian employers are required to pay super to their employees when they earn $450 a week or meet specific criteria based on age or industry. Employer requirements can get confusing however when dealing with international workers or sending employees overseas. Here are the requirements employers must follow when handling super payments to workers with different visas.

Temporary residents:
Temporary residents working in Australia may be eligible to receive super from their employer. Eligibility criteria are the same as it would be for a permanent Australian resident, you must be 18 years or older and have been paid $450 or more (before tax) in a month. Working holiday makers holding a 417 (Working Holiday), 462 (Work and Holiday) or an associated bridging visa can access the super paid as a departing Australia superannuation payment (DASP).

Employees working overseas:
For an Australian employee sent to work overseas, their employer must continue to pay super contributions in Australia for them. The other country may require the employer or employee to pay super there as well if Australia does not have a bilateral agreement with that country. To gain exemption from the super payment in the other country, the employer needs to show the authorities in the other country a certificate of coverage gained from the ATO.