Changes to Payroll Obligations 1 July 2021
There are two key changes for businesses to consider in relation to their payroll obligations which will take affect from 1 July 2021.
If you are unsure what impact these changes will have on your business, please contact our office.
Superannuation Guarantee Rate
The superannuation guarantee rate will increase from 1 July 2021 from 9.5% to 10% of an employee’s ordinary time earnings.
Businesses should consider how this will impact their cashflow.
This will depend on whether the change increases an employee’s total renumeration or, if they are on a package including superannuation, the increase in superannuation guarantee will result in a change in the split between gross wages and superannuation.
It will also be important to ensure that any payroll software accurately reflects the changes to ensure superannuation is calculating correctly.
It should be noted that based on current legislation the superannuation guarantee rate is expected to continue to increase by 0.5% each year, every 1 July, until it reaches 12%.
Single Touch Payroll
Single Touch Payroll came into effect for some businesses from 1 July 2018 and is the requirement for businesses to report payroll information each time an employee is paid.
The current data that is reported to the ATO includes;
- Salaries and wages
- Pay as you go withholding (PAYGW) tax
Previously, however some businesses were provided concessional treatment to either have reduced reporting requirements or none at all.
From 1 July 2021 most of these concessions will end. The two key changes that may affect your business are detailed in the table below:
|Concession Group||Description||Current Requirements||From 1 July 2021|
|Closely Held||Wages paid to yourself or family members within your own business||No STP Reporting required||STP Reporting required at least quarterly|
|Micro Employees*||Businesses who pay 4 or less employees||STP Reporting only required quarterly||STP Reporting required each time an employee is paid|
*There are some exceptional circumstances in which this change may not apply