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Take Note Of Australia's Most Important Bookkeeping Dates

time 481444 1280Aside from mastering the skills of business management, a business owner is also expected to be well acquainted with the concept of deadlines. Proscratination is not an option especially when it comes to making payments. The dates that you need to pay attention to are the filing dates and the tax deadlines. These refer to the bookkeeping dates and falling behind your payment schedule can create a ripple effect on your business.  

Pay as You Go Withholding

Pay as You Go (PAYG) withholding refers to the summary of payments that employees made based on a specified period of time. Your business makes the payment and the summary shows the amount withheld. The statement must be presented if your business did not withhold payments. You must take note that the deadline for PAYG withholding is always 21 days after the end of the month or 28 days after the end of the quarter. It also depends on the system you have chosen. 

Business Activity Statements

All Australian businesses must fulfill the tax obligations such as securing business activity statements. Each month, business owners are required to make payments. The payments should be lodged 21 days after the last day of the month. However, if you choose to pay on a quarterly basis, your payment needs to be made by the 28th day after the quarter. For the December quarter, payments are not due until February.  

Annual Withholding Declarations

There is a good reason employees are required to give their withholding declaration and one of which is to claim entitlement. Claiming entitlement enables employees to reduce the amount withheld from their wages. It can also work in the opposite way by increasing the amount of money withheld from each payment. If there are changes in the employment status or address of your employee, the declaration can also provide you enough information about these changes. Make sure you meet the deadline for tax declaration, which is on August 14th. Once you receive the declaration, you need to make changes to the employees' payments from the very first payment.  

Payment Summaries 

The purpose of payment summaries is to detail the payment that you have made to non-employees. The type of payments that fall under this category is the payment you made under a labour-hire arrangement and voluntary agreement. Take note that the due for the payment summaries is every 14th of July.  

Superannuation  

The funds that will be made available upon retirement are also included in superannuation. Your task as an employer is to set aside a portion of the employee's wages into a superannuation fund. The employees also have a choice of putting additonal funds into the account. It is essential for employers to pay superannuation fees regularly. The payment can either be made on a monthly or quarterly basis. Payment for superannuation must be made 28 days after the established period of time. 

Both business owners and bookkeepers must understand the significance of these dates. If you want to keep your business and finances in check, it is imperative that you take note of these dates. You can avoid penalities if you know when payment should be made. 

All You Need To Know About Keeping Your PAYG Payment Summary

file0001770792325As a business owner, you will be asked to run through your PAYG (Pay As You Go) payment summary and when you have nothing to present, it can spell trouble on your part. It is easy to get sidetracked by other business obligations and forget about the payment summary. You may consider these summaries less important especially when you lodge timely payments. However, there can be instances when you need to file a payment dispute and if you don't have any concrete proof to show, necesary corrections and updates cannot be made. 

What every business owner should understand about PAYG?

 There are two types of PAYG that every business owner must be familiar with: the first one is referred to as Pay As You Go Installment or PAYGI. This refers to the tax installment payments business owners make to the ATO. The second one is called Pay As You Go Withholding or PAYGW. This refers to the tax that employers or business owners collect from payees, workers or employees. The summary provides the payment made and the amount withheld throughout the financial year. 

The importance of payment summary to your business:

 Not everyone has a sharp memory to remember the payment made by the employees. Business owners are often busy on other tasks that tracking payments become the least of their priorities. With PAYG payment summary, it will be much easier to take note of the payments regardless of the date the payments were made. If there are discrepancies on the information, erroneous entries can be corrected right away. 

The benefits of keeping a copy of PAYG payment summary

1. The process of filing taxes becomes much easier.

When it comes to filing your taxes, accuracy is going to play a huge role to ensure a stress-free process. If you already have a payment summary, there is no need to do some calculations as figures are available. You are less likely to overlook essential details such as withholding taxes.

2. A detailed accounting information is obtained.

You can get very specific information about each payee right off the bat when you have a copy of PAYG payment summary. Their tax numbers, tax liablities, salary and earnings are available. In case payees need to gain access to the relevant information, you can provide what they need easily. 

3. It will be simpler and faster to generate reports.

The fact that PAYG information has already been sorted can save you a great amount of time generating reports. Since the information for each payee is available, discrepancies can be spotted easily. 

4. You can answer queries accurately.

If payees are going to ask about under or over-payments, you know where to get the answers from. The summary can also remove doubts especially when it comes to deductions. If you are being audited, the summary can help you stay on the right track. The request for accounting records can also be reduced when the summary is available. As a result, financial transactions become more efficient and errors are effectively reduced. Not only do you spend less time gathering data, but you also complete the task in a timely manner.

Tax Systems And Other Impediments To Business Growth

Business expansion is a big decision and it can create a rippling effect on other factors of your business. It is not just a decision that you make on the spur of the moment. You need to consider several factors before you can decide which direction you are going to take. However, there are several factors that can stop a small business from growing. These factors are part and parcel of having a small business. They only become deterrents when entrepreneurs decide on taking their small business to a higher level. You may need to take a look at these several factors first, before you can decide whether or not you are going to broaden your busines horizons.

Tax systems and other barriers to business growth:

Limited access to the privileges you get from having a small business. 

When you are running a small business, you are also entitled to gain complete access to various small business concessions, which are related to GST, income tax, CGT and many others. Once you decide to expand your business, all of these will be no longer be accessible for you. When taking the road to business expansion, you need to ask yourself if you are willing to gamble or if you are ready to lose access to these concessions. 

Business restructures. 

If you want significant change to happen to your business, you need to welcome restructures. Although it is not going to be an easy decision, being familiar with the effects that restructures make can help you stay on the right track. If you are going to switch to a more effective business structure, you also have to be prepared for the challenges ahead of you. One of the challenges that you are going to face is the CGT liability. 

Payroll Tax  

One of the essentials of putting up a business is making sure that you pay the right tax including payroll taxes. The government is very particular with tax payments and they are keeping their eye on small businesses as well. This is why you need to take it seriously if you really want to run your business smoothly. You subject yourself to a series of problems if you fail to pay on time. You can also get stuck in debt which can take a serious toll on your business. Make sure you keep your payroll taxes in check and avoid falling behind your payment schedule because debts can pile up faster than you know. 

For business owners who decide for an expansion, it is necesary to step out of the business' comfort zone. There are some challenges along the way but once you are familiar with how your business works, everything will fall into place. It does take time before you can reap positive results but it will be all worth your efforts. 

There are other barriers to fulfilling your dreams of expanding your business. Regardless of the obstacles that you will face, you need to keep in mind that you can obtain remarkable results if you are going to consider the risk factors and the steps to take to reduce the possibilities of failing. 

How To Classify Your Allowances Correctly?

For employers, getting bookkeepers to ensure that financial activities including handling allowances are kept in check is a difficult responsibility to fulfill. In fact, it is one of the most complex areas that both employers and bookkeepers are trying to decipher. When you misclassify an amount, the impact on your business and your employees are going to be serious. There will be some corrections that need to be done so you can put your finances the way they should be. Why are there misclassifications on allowances and how can they be avoided? Misclassifications take place when the amount that employees expended are not identified correctly.

When are allowances given to employees?

Allowances are separately identified payments and they are given to employees for:

• Expenses that are work related such as traveling between work sites.
• Working conditions
• Expenses that are not considered as an employee’s tax deduction.
• Special duties or qualifications.

Allowances should not be mistaken or confused for reimbursements. Allowances are intended for covering anticipated costs and these are given whether or not the employee incurs these expenses. These are also considered an assessable income and they are already included in the employee’s tax return. The employee has the right to claim a deduction for the expense.


On the other hand, reimbursements are given to employees for the expenses they have already incurred. The employer may also shoulder the fringe benefits tax (FBT). The reimbursement is not considered an assessable income if it is covered by FBT. The employee cannot claim a deduction for this type of expenses.

Super obligations for paying allowances:

• Reimbursements and expense allowances are not considered wages or salary. They are not ordinary time earnings as well but can be included in ordinary time earnings.
• Employees will only be granted expense allowances if they have fully expended the money on items that are tax deductible.
• When employees are required to work during non-working hours, they will be excluded from ordinary time earnings.

Travel Allowance

• The expenses incurred when employees travel in the course of their duties.
• The expenses for food, drink accommodation and incidental while employees travel.

Reasonable rates for travel allowance

The travel allowances given to employees must also be compliant to the reasonable travel allowance rate for the following expenses:

• Meals
• Deductible expenses which are related to travel
• Accommodation

For domestic travel, the rates only apply in commercial establishments such as serviced apartments, motels and hotels. If another type of accommodation is used other than these commercial establishments, the rates will not apply.

In the event the allowance has not been fully expended, the amount must be recorded on the employee’s summary report and this should be part of the gross earnings. The employee must also show the allowance received as assessable income in their tax return. The claim will only be the amount of the deductible expense that the employee incurred. Tax Office tables can also be used for ensuring that the summary reporting for payment is error-free. Gaining a deeper understanding of how allowances should be handled can save you from committing some errors. You just need to be keen on details and be able to tell the difference between reimbursements and allowances.

­ Questions? Give Andrew a call 0450 605 592

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