Payroll FAQ

Single Touch Payroll


Watch the video below for the latest information on STP Phase 2 transition.

   


Frequently Asked Questions

STP Phase 2

 

+ What is the best way to deal with STP and payroll for short-term employees e.g. backpackers?

The STP and payroll requirements for all employees is the same – regardless of the length of contract.

+ Do I need to report STP for every casual employee for every period even if they did not earn a pay in that period?

No. You only need to report on the employees that worked during that pay period. Just ensure you mark the employee terminated in your system once they stop working for you.

+ What is the best way to handle year end finalisation of STP?

Don’t assume your program is correct – cross check that it matches what you have lodged through your BAS and what is showing in your software system.

+ Do you need to submit STP for an employee who has been paid for a trial e.g. two weeks and then not offered a position?

Yes – during this period they would still be considered employed by you and would then require their pay to be processed as a wage and lodged through STP. Just ensure you terminate them once they leave.

+ What is the correct way to process tax for teenage family members?

Reporting STP does not change the tax process for the employee, regardless of whether they are family. However, it is important to note that from July 1st this employee will need to be reported as a Closely Held Employee.

+ What should I do if I make an error when reporting STP?

As payroll can be quite fluid, with unexpected bonuses, allowances or overtime, it is okay to make mistakes. Year to date values can be amended in the next report. You do not need to backtrack and correct previous reports.

+ How long is the grace period to rectify mistakes in reporting STP?

There is a 14-day grace period to correct any mistakes made after reporting STP.

+ If your PPE date is a public holiday, how do you process pays and report STP?

The existing process applies. Process and report on or before the PPE date.

+ Does super need to be reported in STP?

Yes. Super also need to be reported with each PPE.

 

Closely Held Employees

 

+ What are the requirements for paying Closely Held Employees?

For more information on Closely Held Employees requirement, click here.

+ What do farm businesses need to consider and implement with the introduction of Closely Held Employees?

For more information on options for reporting amounts paid to your Closely Held Employees, click here.

+  Regarding payroll and HR processes, what is the difference between Closely Held Employees and employees?

For more information on choosing reporting options, click here.

+ Do you have to report quarterly if the Closely Held Payees does not work?

For more information on reporting actual payments quarterly, click here.

+ Do we need to tax ourselves closely held employees?

As each case is unique, it is best to speak to your tax agent.

 

Annualised Salaries

 

+ What is included in an Annualised Salary contract?

Annualised salary contracts include information such as overtime conditions and how the annual salary is calculated.
For more information on new rules for annual wage arrangements, click here.

+ Where should I start with Annualised Salaries?

If you have full time employees on an annual salary, review their contract to ascertain whether it has an adequate offset clause. Also review whether their pay in each pay period is sufficient to cover them for all hours worked. If not, then follow the provisions of the award to put the annualised wage arrangement in place.

+ Why does Annualised Salaries apply to farm business owners?

Annualised wage arrangements are now included in many of the modern awards, including the Pastoral Award 2010. This is only applicable to businesses operating in the national system. The Fair Work Commission have inserted these provisions as a way to protect employees from underpayment by their employer. 

+ So what does this mean for my farm business?

If you are in the national system and you have full time employees that are on an annual salary you need to do an audit of those employees and identify which of those employees need to be on the new annualised wage arrangements.

+ What if I have employees who work long hours?

If your employees work long hours e.g. over harvest or seeding, or if their hours fluctuate regularly, it is likely that they may require an annualise wage arrangement.
For more information, click here.

+ Do full time employees who are paid an hourly rate need to be considered for annualised salaries?

No, if you are paying your employee by the hour.

 

HR Policies and Practice

 

+ What HR polices would you suggest a farm business have as a priority or minimum?

Your farm business HR policies are your ground rules for how you want your employees to behave. As a minimum, your policies should communicate what is expected of them. Some common examples are:

  1. Sick leave e.g. do you require medical certificates for Monday and Friday
  2. Annual leave e.g. required notice for applying for leave
  3. Use of drugs and alcohol
  4. Time sheeting e.g. when, where and how to log in and out of shift tracking apps
  5. Equipment and vehicles e.g. rules around not using vehicle for personal use
  6. Code of conduct

+ Is there an average number of hours per week that employees should be capped at? (Exclusive of harvest and seeding when hours blow out)

Pastoral Award: Ordinary hours maximum is 38 hours; any additional hours is considered overtime. However, if ordinary hours agreed in the contract is 45 per week, and an employee requests dropping down to 38 hours, under the Pastoral Award, you cannot force them to do 45 hours.

+ What is the best way to manage poor performance of employees?

  1. Firstly, during a casual/informal conversation inform them of the performance issue and provide guidance on how to improve or rectify the performance issue
  2. If poor performance continues, follow up with a more formal conversation and provide clear steps on how to improve performance and communicate a clear time frame
  3. At the end of the time frame, follow up and if the performance issue has not been rectified. You may need to consider informing the employee that their position is at risk of being terminated (this may depend on the performance issue).
  4. Document all conversations

+ What are the benefits of using Deputy as a time sheeting app?

  1. Double check staff hours with wages program
  2. Understand who is on the property
  3. Understand where each employee is located on the property via GPS tracking
  4. Track staff hours; they are expected to log on when staff arrive and off before they leave
  5. Understand how long employees are working for
  6. Submit tax file declaration through the app

Sign up for a free trial of Deputy here.

+ When would I use an individual flexible workplace agreement?

An individual flexible workplace agreement is used to vary terms of the award. For example, if you have an employee who previously worked full time and their hours were 8:00am – 5:00pm and now needs to pick their children up from school at 3:00pm, so has requested to work from 6:00am – 3:00pm.

For some awards, the hours worked prior to 8:00am would be considered over time. So, you would put an induvial flexible work agreement in place to say that you have agreed that the employee will work the set hours of 6:00am – 3:00pm and not be entitled to the overtime.

 

Concessional Reporting

 

+ Will quarterly concessions for micro and seasonal/intermittent employers finish on June 30th 2021?

From 1 July 2021, the quarterly reporting concession will change. It will only be considered for micro employers experiencing exceptional circumstances.

+ Are there any concessions for primary producers who only employ staff seasonally, such as shearers?

Yes – there are concessional options for seasonal and intermittent employees. Concessional seasonal reporting is ideal for businesses employing staff for busy periods. Micro employers can apply for this online, or via their agent.

+ How does concessional reporting give flexibility for closely held employees?

For more information on concessional reporting click here.

 

ATO Resources & myGov

 

+ How does MyGov work with limited internet access?

There is nothing the ATO can do in terms of MyGov access in areas with poor internet access.

However, if you are an employer with limited access and therefore are unable to report STP every payday, deferral and exemption opportunities can be granted.

+ Can employees still lodge their tax return if their information is not tax ready in their MyGov account?

Yes, they can. However, they will receive a pop-up warning that requires them to acknowledge that they are trying to lodge their tax return before their employer has finalised their income statement. As their employer may finalise with different figures, this warning must be accepted before the lodgement will proceed.

+ Do seasonal workers need a MyGov account?

The ATO cannot force individuals to get a MyGov account. If they are unable to get one or do not want one, they can contact the ATO directly and the ATO will send them a printout of their income statement.

+ If I am using MyGov to lodge BAS, do I still need to get a MyGovID?

Yes.

 

Contractors vs Employees

 

+ As an employer should I be concerned that superannuation and worker compensation costs are being broken down and shown on the invoice or is it just their invoicing system?

It’s the invoicing system and the preferred method chosen by the head contractor to show these values on the invoice.

+ When working with a contractor, should you have a written contract or agreement prior to the work being done?

It is highly recommended that you have a written contract prior to work being commenced.

+ When should we as the employer be paying the super for the contractor? e.g. Our shearing contractor calculates the super for his shearers and pays it. Is this correct?

Refer to the Employee Contractor Decision Tool and use it as if you were paying the shearing contractor and see the results.

  

This content is general information only. It does not and is not intended to replace professional advice.  
© Master Group (Aust.) Pty Ltd makes every attempt to ensure the information is accurate at the time of publishing.  


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