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Upcoming Changes to Workplace Laws

BAS Agent's Blog, Payroll & Superannuation / By / / , , , / 3 minutes of reading

Fair Work often updates the rules regarding payroll and right now is no different! Several aspects of payroll have or will change in the very near future. Read below for the details.

1. Small Business Employers Must Offer Paid & Domestic Violence Leave from 1st August 2023

All employees in the Fair Work system, including part-time and casual employees, will soon have the right to 10 days of paid family and domestic violence leave within a 12-month period.

This new entitlement will be available to employees of small business employers (employers with less than 15 employees on February 1, 2023) starting from August 1, 2023. Employees of non-small business employers have already been able to access this leave since February 1, 2023.

Employees will receive the full 10 days of leave upfront, without needing to accumulate it over time. To help you understand and manage your new responsibilities, access the Fair Work fact sheet here. You can also find a summary of the details in our blog.

2. Paid Parental Leave Scheme Changes

From July 1, 2023, there will be some changes to the paid parental leave scheme. One of these changes is that the current 18 weeks of paid parental leave pay will be combined with the current 2 weeks of Dad and Partner Pay. This means that partnered couples and single parents will now be able to claim up to 20 weeks of pay. For more details go to this Fair Work page.

3. Right to Superannuation in the National Employment Standards (NES)

Starting January 1, 2024, the National Employment Standards (NES) will have a new provision that guarantees superannuation contributions for employees. This means that employees, employee organisations, and the Fair Work Ombudsman can make sure that employers pay the correct amount of superannuation or address any unpaid amounts under the Fair Work Act. 

Employers are already required to contribute to superannuation for eligible employees according to existing laws. As long as employers meet their obligations under these laws, they will not be in violation of the NES provision.

The Australian Taxation Office (ATO) will continue to oversee employer compliance with superannuation guarantee laws.

4. Changes to Unpaid Parental Leave

Starting July 1, 2023, the Fair Work Act will bring in more flexibility for employees who take unpaid parental leave. This change is in line with updates to the Paid Parental Leave scheme. Now, employees can take up to 100 days of their 12-month leave entitlement flexibly within 24 months after their child is born or placed with them. This is a significant increase from the previous allowance of 30 days.

Pregnant employees will also have the choice to access their flexible unpaid parental leave up to 6 weeks before their expected due date.

Furthermore, employees will no longer be limited to taking a maximum of 8 weeks of unpaid parental leave at the same time as their spouse or de facto partner. Both parents can now take up to 12 months of unpaid parental leave within 24 months of their child’s birth or placement, and they can even apply for a 12-month extension beyond the initial leave period.

5. Authorised Employee Deductions

Starting on December 30, 2023, employees will be able to authorise recurring salary deductions from their employers, even if the deduction amounts change. Before, they had to provide a new written authorisation every time the deduction amount changed. With the new law, employees can give a single written authorisation that allows their employer to deduct varying amounts from their salary. The employee can still withdraw this authorisation in writing at any time. It’s worth noting that deductions for specific amounts can still be authorised if they mainly benefit the employee and are provided in writing.

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ATO STP Filing Error Codes – what do they mean and how do you fix them?

BAS Agent's Blog, Payroll & Superannuation, Single Touch Payroll / By / / , , , / 2 minutes of reading

At the time of writing this blog, most employers are actively submitting payroll events via Single Touch Payroll (STP). STP has been around since July 2018 and has now evolved into STP Phase 2. Most software companies used by small businesses to file STP reports, are now STP 2-enabled, so many employers will be reporting payroll via this mode.

While the process of filing or reporting payroll via STP is fairly straightforward, there can be occasions where things may go wrong. This is particularly true now, given the setup for STP Phase 2 is quite involved and onerous. Should the setup for STP 2 not be done correctly, this will most certainly lead to filing errors.

If a pay event is returned after filing it, the ATO will provide an error code that describes the issue. While these codes are useful in terms of helping the lodger understand what is wrong, they do not assist in providing details about how to fix the error within the software you may be using.  Luckily, there is help available from each of the main software providers. 

Here is a list of the software providers and the links to their help pages, should your filing return an ATO error code:

MYOB

QBO

Xero

Also, from Reckon, here is a list of the most common submission errors via the ATO. Each error code is explained and a reason behind the error is given. This can be a helpful starting point when trying to rectify any STP errors.

I hope this blog has been helpful to you if you are an employer or bookkeeper. It would be a good idea to add the link for your chosen software to your favourites list for future access, should you encounter an STP filing error.

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What NOT to include in payslips for paid Family & Domestic Violence Leave

BAS Agent's Blog, Payroll & Superannuation / By / / , , , / 2 minutes of reading

Here is a reminder that access to paid family and domestic violence leave for employees of non-small business employers (employers with 15 or more employees) began on 1st February 2023 (and 1st August 2023 for small business employers). The leave is for 10 days for any full, part-time or casual employees and is not pro-rated. Read more about this new leave type in our previous blog here.

Something important to call out in relation to paying this leave is the information that is prohibited from being included on the employee’s payslip. 

Employers must not include:

  • A statement that an amount paid to an employee is a payment in respect of the employee’s entitlement to paid family and domestic violence leave
  • A statement that a period of leave taken by the employee has been taken as a period of paid family and domestic violence leave
  • The balance of an employee’s entitlement to paid family and domestic violence leave

The reason for not including this information is that if a perpetrator of violence gains access to the employee’s payslip and sees that this type of leave has been taken, this may pose a significant risk to the employee.

When setting up this type of leave in the payroll system, it is important to give it a generic name that does not reference the words “Family and Domestic Violence Leave”. In fact, not calling it “leave” at all is best practice. Given the payment is for an employee’s full rate of pay for the hours he/she would have worked if they weren’t on leave, then simply producing a payslip that shows “gross” pay, is recommended. In the back end of the payroll setup, details can be added noting what the payments actually are, and leave entitlement balances can be recorded but not included on the payslip (simply uncheck that box in the employee’s payroll setup (software-dependent)). 

Precluding statements about this type of leave on an affected employee’s payslip is now part of the Fair Work Legislation Amendment Regulations 2022. Employers must take note and ensure that their payroll systems are set up correctly to reflect these amendments. Failing to do so may/will put affected employees at significant risk. If you are an employer, make sure you action this now (or by August 2023 if you are a small employer).

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A Better Employee Onboarding Experience is coming…

BAS Agent's Blog, Payroll & Superannuation / By / / , , , , , , / 3 minutes of reading

The way new employees are onboarded is changing. Currently, employers ask new employees to provide a Tax File Number Declaration form, a Super Choice form, and also other personal information required in order to set them up in their payroll systems.

While this process is fairly straightforward, often employers find themselves chasing new employees for the data and at times, needing to confirm details that may or may not be correct (usually not correct in my experience!). This process can therefore be very time-consuming and tedious for employers, not to mention that the room for error is very high. It is also not a great deal of fun for new employees either!

Enter the “New Employment Form”.

This is an all-in-one onboarding form that new employees access from their myGov accounts. The form will provide both the ATO and the employer with all of the information required to set up new employees in one easy action.

Importantly, this form will replace several forms. These include the Tax File Number Declaration, the Super Choice form, the Variation to Tax Withholding Declaration, the Variation to Medicare Levy Declaration, etc. Employees can also use it to update their tax circumstances, for example, if:

  • their residency status has changed
  • they no longer have a government study and training loan
  • they are claiming the tax-free threshold from a different employer.

This change to employee onboarding will reduce the administrative burden for employers and increase process efficiencies. It will also reduce data recording errors which are very common when obtaining personal details from new staff members.

How the new onboarding process works

Firstly, the employer needs to provide his/her ABN to the new employees.

To access the new form, employees will require a myGov account linked to the ATO. Once signed in they will:

  • access ATO online services
  • go to the ‘Employment’ menu
  • select ‘New employment’ and
  • complete the form then
  • submit the form

After submitting the form, the details will be sent straight to the ATO removing the requirement for employers to send completed TFN Declarations separately. It’s important to note that the changes to Single Touch Payroll Phase 2 have also made this possible i.e. every time a pay run is reported via STP 2, employees’ tax information is sent to the ATO. Although this step can now be removed from the onboarding process, employers must continue to receive completed TFN Declarations from new employees and retain them as part of the employees’ records.

Once the form is submitted, the employee will print the form and give it to the employer who will use the information to set up the employee in the payroll system.

It’s important to note that the downloadable version of the TFN declaration form will be removed by the end of 2022.

 The ATO is therefore requiring new employees to be onboarded using the new above process going forward. This is a new process that both employers and employees need to understand and adopt. It has benefits in terms of efficiency and data security and in my opinion, is the way forward.

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New PAID Family & Domestic Violence Leave

BAS Agent's Blog, Payroll & Superannuation / By / / , , / 2 minutes of reading

Employees (full-time, part-time, and casual), will soon be able to access 10 days of paid family and domestic violence leave in a 12-month period.

This will replace the current 5 days of unpaid leave available to affected employees.

Employees will be entitled to the full 10 days upfront, meaning they won’t have to accumulate it over time. The leave won’t accumulate from year to year if it isn’t used. The leave will renew every year on an employee’s work anniversary.

The new leave entitlement will be available from:

  • 1 February 2023, for employees of non-small business employers (employers with 15 or more employees on 1 February 2023) 
  • 1 August 2023, for employees of small business employers (employers with less than 15 employees on 1 February 2023

Reasons for requiring this type of leave could include:

  • making arrangements for their safety, or the safety of a close relative (including relocation)
  • attending court hearings
  • accessing police services
  • attending counselling
  • attending appointments with medical, financial or legal professionals

An employer can ask for evidence from an employee when the leave is applied for. Types of evidence can include:

  • documents issued by police
  • documents issues by court
  • family violence support service documents or
  • statutory declaration

Employees will continue to be entitled to  5 days of unpaid family and domestic violence leave until they can access the new paid entitlement.

Reporting paid Family and Domestic Violence Leave on payslips has very specific rules – read our blog here to find out more!

For more information go to the Fair Work website.

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Common STP Phase 2 Mistakes

BAS Agent's Blog, Payroll & Superannuation, Single Touch Payroll / By / / , , , , / 3 minutes of reading

STP Phase 2 is in full swing. It began on 1st January 2022 but various accounting software have not been ready until recently. This means many employers are only just now learning about, and setting up their payroll systems, to comply with STP 2 requirements.

Unfortunately, as it is still relatively new, some employers are making errors when reporting via STP Phase 2. Recently, the ATO published a list of those mistakes it is seeing. I am highlighting them here so you can be sure to avoid them when you start to report via STP Phase 2.

Common STP Phase 2 Mistakes List

  • Breaking the continuity of year-to-date amounts from STP 1 reporting. Unless you are using the replacing IDs method for transitioning to STP 2, you need to ensure that you maintain the STP 1 data that you have already reported. Your accounting solution will help you manage this and you should contact your provider if you require assistance with this issue.
  • Selecting “not reportable to the ATO” when setting up pay codes/categories. Most payments to employees need to be reported except for:

1. Travel allowance below the ATO’s reasonable amounts

2. Overtime meal allowance below the ATO’s reasonable amount

3. Reimbursements

4. Post-tax deductions except for those you need to separately identify.

  • Omitting a cessation date and reason. When an employee leaves your business, you need to report the date he finished and the reason why he left. Your accounting solution will include these fields to complete upon termination. The ATO will share this information with Services Australia which means you will no longer need to complete a separation certificate for that employee.
  • Some income types you report for employees will also include a special country code. If you are required to report a country code, you must report the code relevant to that employee. Some employers are incorrectly reporting a “NA” country code, thinking that it means “not applicable”. It actually means “Namibia”. So if you use NA in your reporting, you are telling the ATO that your employee is either working: 

1. Overseas in Namibia or,

2. Is in Australia and they are from Namibia.                                     

  • Allowances. All allowances must be reported separately using one of 8 specific allowance categories. You must not simply report an allowance to the “Other Allowance” category (allowance type OD). You must report allowances using their appropriate category because each category is treated differently for tax, super and social security purposes. Only report an amount as Allowance type OD if it’s an allowance that does not belong in one of the 8 specific allowance categories. 
  • Treating reportable super contributions (RESC) and salary sacrifice as the same thing. These are 2 different things and need to be reported correctly. Check out this ATO video which explains how to report these payments via STP 2.

Here is the link to the ATO webpage which provides more in-depth information about the STP 2 reporting mistakes listed above, including several helpful videos.

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Minimum Wage Increase July 1 2022

BAS Agent's Blog, Payroll & Superannuation / By / / , , / 2 minutes of reading

As well as the super guarantee increase to 10.5% on 1 July 2022, employers now need to factor in a wage increase. Read more below.

National Minimum Wage Increase

The Fair Work Commission (FWC) has ordered a 5.2% wage increase to the national minimum wage (NMW). From 1 July 2022, the NMW will increase by 5.2%, which amounts to $40 a week. The new National Minimum Wage will be $812.60 per week or $21.38 per hour.

Award Minimum Wage Increase

The FWC has announced that minimum award wages will increase by 4.6%, which is subject to a minimum increase for award classifications of $40 per week and based on a 38-hour week for a full-time employee. This means minimum award wages above $869.60 per week, will get a 4.6% increase and below $869.60 per week, will get a $40 increase.

When to Apply the Increase

The new National Minimum Wage will apply from the first full pay period on or after 1 July 2022. This means if you have a weekly pay period that starts on Mondays, the new rates will apply from Monday 4 July 2022.

If you are covered by an award, award increases happen in 2 stages. Most awards will increase from the first full pay period on or after 1 July 2022 but, for some awards as listed below, the increase will happen from 1 October 2022.

  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Air Pilots Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020
  • Hospitality Industry (General) Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020

These awards relate to industries that are considered to be still adversely impacted by the COVID-19 pandemic.

To read more information about the wage increase go to this Fair Work web page.

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How to Apply for an STP 2 Deferral

BAS Agent's Blog, Payroll & Superannuation / By / / , , , , / 2 minutes of reading
As you probably know by now, STP Phase 2 has begun. It began on 1st January 2022, with a deferred hard start date by the ATO of 1st March 2022.

Your payroll software provider may have a deferral in place with the ATO for a later start date (see list below) which will cover you as their customer. However, some software providers are ready now and do not have a deferral in place. Examples of these are Quickbooks Online (KeyPay) and Saasu. If you are using one of this software or something else, then your business should be ready for STP 2 and be reporting data to the ATO as per their requirements. (Note, to check if your software is STP 2 enabled, you can go to this ATO page and search for “Payroll Event 2020”. This will produce a list of software that is STP 2 – ready.)

If you know you are not ready and need more time, you can try to apply to the ATO for a deferral. You can do this via Online Services for Business. Simply log in and follow these steps:

1. Select Employees
2. Select STP deferrals and exemptions
3. Select Delayed transition to STP Phase 2 expansion
4. Complete the request
5. Click Submit.

You will also need to advise:
1. Which payroll software is being used;
2. The reason a delay is being sought, and
3. The expected date the business will be able to start reporting under STP 2.

Software Providers with a Current STP 2 Deferral
The following SPs have a current deferral in place with the ATO which also covers you, as their customer:

Xero – up to 31/12/22
MYOB – up to 01/01/23
Reckon – up to 01/01/23
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Unpaid Pandemic Leave

BAS Agent's Blog, COVID-19, Payroll & Superannuation / By / / , , / 2 minutes of reading

As per Fair Work, some employees will be entitled to unpaid pandemic leave from 31 December 2021 to 30 June 2022. This affects 74 awards – see this list to check if your workplace is affected.

But what is unpaid pandemic leave and how should it be used?

What is unpaid pandemic leave?

If an employee is prevented from working because he has to self-isolate as directed by:

  • government or medical authorities or his doctor, or by
  • enforceable government directions placing restrictions on non-essential businesses,

he will be eligible for up to 2 weeks’ unpaid pandemic leave. 

What do I need to know about unpaid pandemic leave?

  • Full-time, part-time and casual staff are eligible.
  • Paid leave does not have to be used before pandemic leave is taken.
  • All staff can take the 2 whole 2 weeks leave - it is not pro-rated for staff who do not work full-time.
  • Unpaid pandemic leave does not affect other types of leave, paid or unpaid.

My employee wants to take unpaid pandemic leave. What should I do?

Your employee needs to advise you when they will take the leave (even if it’s already started) and the reason they are taking it. He should do this via email so that you both have written evidence as to when the leave was taken. The employee should indicate how long he will be absent from work. You can ask your employee to provide evidence that shows why they took the leave, such as a medical certificate. Note, if your employee is actually ill from Covid-19, then he/she may benefit from taking paid personal leave instead. In this case, you could ask for other evidence such as a positive PCR or a Rapid Antigen Test reading.

Go to this Fair Work page for further information.

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Transitioning to STP Phase 2 – Planning Ahead

BAS Agent's Blog, Payroll & Superannuation, Single Touch Payroll / By / / , , , , / 3 minutes of reading

This is the final blog in a four-part blog series about STP Phase 2. In part one of this blog series, we looked at the benefits of phase 2, then, in part two, we outlined which software providers are ready for STP 2 now. Part three in the series delved deeper into the technical side of STP Phase 2. This final blog will focus on the sorts of things employers or their bookkeepers can do now, in order to plan ahead for a smooth transition to STP Phase 2.

STP Phase 2 will require employers and/or bookkeepers to firstly understand how it will change payroll, and secondly, the specific changes they need to make to their own payroll. It can be overwhelming and confusing, to say the least! The main thing to remember is that your payroll provider will do most of the heavy lifting in terms of creating the infrastructure needed to facilitate STP 2. Your job is to understand the terminology and how the new reporting requirements apply to your payroll setup and your employees/payees. This may take some time, and thankfully, time is on your side, given the ATO has provided a blanket deferral until 1st March 2022. Also, several payroll providers have attained a much longer deferral which also covers their customers.

The best thing you can do is to start to review your current payroll setup. Check employees’ details both personal and payroll-related. I have created a spreadsheet you can use to review your current employees/payees which you can download and use as needed (see below). This spreadsheet will collate most of the information you will need in order to transition to STP 2. Start the process by completing the spreadsheet and then, when you are ready to transition, you will have most of the required information at your fingertips. 

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Employee Review Worksheet for STP Phase 2

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Next, sit down with your employees/payees and explain what will happen once STP 2 begins. Tell them about how their information will be shared with the ATO and Services Australia. Explain that their payslips and income statements will look different and why. You may need to ask payees for more personal information during the setup of STP 2 – try to get ahead of the game and find out what sorts of data you don’t have and work with your payees to obtain it.

Keep an eye on your payroll provider’s pathway to STP 2. Your provider will advise you when you can transition and how it is to be done within the software itself. This may not happen for some months, but you can still prepare as per my above tips!

Lastly, think about when you would like to transition to STP 2. Yes, there are time constraints as per the ATO but they do say you can move over at any time during the year (provided you are covered by a deferral). However, you may like to put a plan in place and decide on a cutover date. That way, you can work towards the move to STP 2 in a timely manner and in a fashion that works for you and your business.

Lastly, to help you with your STP 2 plan and research, the ATO has created a set of guidelines for employers (see below). Download it and pop it away for use when you are ready to transition (or start your research now). Remember, don’t panic! There’s plenty of time and there will be a lot of help available to you when the time comes to tackle STP Phase 2!

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ATO Guidelines for STP Phase 2

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