Quick Recap: PAYG Statements and a reminder what the labels means
With another financial year is over, it’s now time to issue your payment summaries to your employees. You have until the 14th July to get these issued to your employees. The Payment Summary Annual Report is due for lodgement with the ATO by the 30 September if lodging through a BAS or Tax agent, or 14th August if there is no agent involved in preparing the reports.
Since 1st July 2017 there have been two updated to payment summaries which you should be aware of:
- You are now required to show a ‘type’ of gross payment next to the gross payments label. This will either be an S for Salary or H for registered working holiday makers
- It is now also required that employers tick if they are FBT exempt or not. If you are not eligible for the exemption you are still required to tick no
What do the boxes mean?
Tax withheld is the amount of tax withheld during the financial year. This should match up to your accounts and what has been lodged to the ATO during the financial year.
Gross Payments is where you record the total wages, salary, commissions and bonuses before any tax is withheld. If an employee has salary sacrificed any amounts during the financial year, you do not include these amounts in gross payments. If you are showing amounts separately at other labels including allowances, reportable FBT, lump sum payments or Community Development Employment Projects (CDEP) payments, do not include these in gross payments.
Reportable FBT must be shown separately if the total taxable value of the benefit you provided to your employee exceeds $2,000 during the FBT year. If this is applicable to you, you must include the grossed-up taxable value and report this on the payment summary.
Reportable employer super contributions are those payments that are made in addition to the standard super guarantee contribution. These include salary sacrifice amounts and any other additional amounts paid to your employee’s superannuation fund at their request. Although these payments aren’t included in the assessable income of the employee, they still need to be shown separately for reporting purposes.
If you have made any lump sum payments during the year, for example for redundancy payments, early retirement scheme payment or unused annual long service leave, these need to be recorded next to the correct label (A,B,C or D) and not included in the gross payments field.
Allowances paid to employees such as a tool allowance, uniform or car allowance (based on cents per Km basis) must be reported under the allowances tab and not be included in the gross payments above. If there are two or more allowances, make sure that you record the total value next to ‘total allowances’.
Union Fees and work place giving must also be recorded separately and the total is included in gross payments. You will need to record the names of the organisation when completing these fields.
Employment Termination Plan
If an employee was terminated during the financial year, you will need to complete an employment termination PAYG payment summary. This is not applicable to unused annual leave as this does not form part of an Employment Termination Plan (ETP). Payments that would be included in an ETP would be payments used for:
- Unused rostered days off
- in lieu of notice
- ‘golden handshake’
- invalidity payment
- certain payments that are the result of the death of the employee
If you need any help in the preparation of your PAYG payment summaries, please contact Aptus and will be able to assist.
Author: Megan Tully