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What you need to know about ATO & OSR real time data sharing

Single touch payroll is now in full swing after coming into effect on 1 July 2018 and the Australian Tax Office (ATO) aren’t keeping the insights to themselves. Real-time payroll information for employers (with 20 or more employees as at 1 April 2018) is now being shared with the Office of State Revenue (OSR) to ensure businesses are compliant with tax obligations.

Up until now the ATO relied on businesses to report their gross wages and PAYG Withholding in their BAS and once lodged the ATO became aware of their liability. While this is still required, with Single Touch Payroll the ATO have a direct line of sight and are aware of the PAYG Withholding and employee superannuation liabilities of employers in real time.

Similarly, the ATO has shared certain details regarding an employer’s gross wages with the OSR. Employers getting close to the payroll tax threshold would often receive warning letters from the OSR following the end of a financial year reminding them of their payroll tax obligations. Now with real-time data being shared by the ATO with the OSR, government agencies are now keeping a closer eye on business payroll obligations.

Employers, particularly smaller organisations that may have experienced growth, will need to pay close attention to thresholds and payroll tax rates or risk an unexpected payroll tax bill. Payroll tax is payable if you are an employer (or group of employers) who employs in Queensland and your weekly wages exceed $21,153. It’s worth noting that ‘wages’ for payroll tax purposes includes:

  • Wages
  • Remuneration
  • Directors fees
  • Fringe benefits
  • Shares and options
  • Certain payments to independent contractor
  • Salaries
  • Commissions
  • Bonuses
  • Allowances
  • Termination payments
  • Employer superannuation contributions

For those new to Qld payroll tax, the tax rate is calculated at 4.75%. There is a maximum payroll deduction of $1.1 million and the deduction reduces by $1 for every $4 of taxable wages over the threshold of $1.1 million.  Deduction cease when your Australian taxable wages exceeds $5.5 million. Payroll tax is a state-based tax with varying thresholds in each state (some lower than Qld). For those that employ staff interstate it important to review the thresholds and registration requirements of each state.

The speed and transparency of real time payroll information means debt recovery action in relation to the liabilities are happening much sooner than ever before. This adds increased risk for Directors of being personally liable for unpaid PAYG Withholding and superannuation liabilities via the issue of Director Penalty Notices. Directors will need to be vigilant to ensure that Activity Statements are both lodged and paid on time.

If you would like to discuss Single Touch Payroll or payroll tax obligations please contact Nathanael Lee, Tim Taylor or Jarryd Lazzarini on 07 3218 3900.

Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.

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